adminNgoni Dapira Business Correspondent
THE Manicaland Business Association (MBA) has joined the bandwagon of national business lobby groups denouncing the proposed 49 percent increase in electricity tariffs by the two subsidiaries of power utility, Zesa Holdings. MBA is the umbrella body of various lobby groups in the province across the spectrum, a brainchild of the Minister of State for Manicaland Provincial Affairs, Mandi Chimene.
Last year in December, the Zimbabwe Energy Regulatory Authority said the Zimbabwe Electricity Transmission and Distribution Company and the Zimbabwe Power Company had applied to increase electricity tariffs this year.
ZPC proposed a 22 percent increase in power costs from 5,06 cents per kilowatt hour to 6,64 cents per kilowatt hour while ZETDC proposed to sell the power to consumers at 14,69 cents per kilowatt hour from 9,86 cents, an increase of 49 percent.
The energy regulator said the increase was meant to cater for additional emergency power imports from regional utilities due to low supply from the Kariba Hydro Power Station, owing to reduced water levels in Lake Kariba.
MBA president Mr Richard Chiwandire said the move would derail strides being made to prop-up the ailing manufacturing industry and drive up the cost of production.
He added that the increase in electricity tariffs was unfair given that companies were already burdened by the existing charges.
Mr Chiwandire said policies were now contradicting with the Ministry of Industry and Commerce on one end clamouring for the reduction of the high cost of doing business in the country while the Ministry of Energy and Power Development speaks the inverse towards the realisation.
“As business we have been calling for pragmatism of which increase in electricity tariffs is not a pragmatic solution. Industry is already struggling to pay the existing tariffs, what-more of the proposed increase. The National Competitiveness policy recognised the need to reduce cost drivers in the economy so that we remain competitive, of which tariff hikes are divergent to this cause, ” said Mr Chiwandire.
The call by MBA comes after national lobby groups, the Confederation of Zimbabwe Industries, Chamber of Mines of Zimbabwe, Commercial Farmers’ Union, Zimbabwe Farmers’ Union and the Zimbabwe Commercial Farmers’ Union, made a joint statement on Monday condemning the proposed hike.
Zesa says it was owed $1 billion by consumers that cited economic challenges as the major obstacle.
Real estate businessman, Mr Joseph Sanhanga said the feasible long-term solution was in capacitating Independent Power Producers, rather than overburdening Zesa.
Mr Sanhanga who owns a township just out of Mutare, Valley of Kings, said since last year he had been failing to get on track his solar farm projects due to policy incoherency on the ground.
“We have been waiting for the Special Economic Zones Bill and the Build Operate and Transfer Bill to be enacted to pave way for major investment projects in renewable energy in the country.
“We have since embraced the call to invest in renewable energy projects but on the ground as business we do not see advancement from Government. We want to see action and not just pronouncements by Government.
“There are a lot of bottlenecks derailing Independent Power Producers on the ground but they stand as the greatest solutions to the country’s energy crisis if well incentivised and empowered,” said Mr Sanhanga.
Zesa has recently started to import 300MW from South Africa’s Eskom to augment local generation.
Government is also set to launch the national Solar Water Heating Programme by March, targeting to install and retrofit 250 000 solar geysers over the next five years.
This development comes as Government has begun making legislative amendments to ban the use of electric geysers in the country which could save an estimated 300MW to 400MW of power on the national grid.
Mr Sanhanga also urged Zesa to reduce and collect what is owed adding that there was need to restructure internally at all levels for cost control.
He said though Government plans were at an advanced stage to build the Batoka Dam project which is expected to produce relatively cheap power, IPPs in renewable solar energy were the most feasible venture in the long-term.
Upon completion, the Batoka power station is expected to generate
2 400 megawatts of electricity to be shared equally between Zimbabwe and Zambia.
Other projects in the pipeline include the Hwange Expansion Project, to produce an additional 600MW of power, work at the Bulawayo thermal power station and the Munyati power station as well as the 120MW Mutare emergency power plant expected over the next 18 months.
As of last week, Kariba was generating about 470 megawatts of electricity from about 750 MW last August when the Zambezi River Authority introduced water rationing to maintain acceptable water level.
The country is currently producing around half of the required 2 200 MW.
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