CTC raps public utilities

enterprise and economic development.
Zesa Holdings received most of the battering for its shoddy service, unreliable billing system and inability to meet demand.
The commission concluded that the high cost of utilities was the major cause of high production costs that have led to local industry being uncompetitive locally and regionally.
This came out at workshops held in Bulawayo and Harare through which CTC sought to determine the socio-economic impact of pricing of public utility services.
CTC said the workshops probed the issues of excessive pricing of utilities – electricity, water, telecommunications, ICT and municipal rates and levies.
Most public utilities, especially Zesa Holdings, were heavily criticised for short-changing consumers through shoddy service which did not match demand.
Although, public utilities face serious performance challenges, most of them were criticised for failing to realign their potential to optimal use.
“There was general consensus that the pricing of our utilities was the major cause of high cost of production by our industry and that this was in turn causing the industry not to be competitive locally and regionally,” said the commission.
CTC’s workshops also discussed specific topics on utilities, such as their role as enablers of economic growth, sectoral performance and ability to pay utility charges and affordability of utilities by industrial and commercial players. It was established that most utilities were also taking advantage of their monopoly and dominant positions to short-change consumers who have no alternatives.
The commission determined that there was urgent need to address serious challenges facing Zesa Holdings to enable it to meet growing demand for power.
Zesa is currently producing an average of 1 200 megawatts against a national demand for power of more than 2 000MW at peak periods.
At the current levels the power utility is operating at 63 percent of its installed capacity.
“Zesa acknowledged that it finds itself in a vicious cycle whereby it needs to raise tariffs to improve services, at the same time acknowledging raising tariffs raises inflation and consumers . . . do not have financial capacity,” said CTC.
Zesa Holdings has recently increased power tariffs by an average of 31 percent in what was expected to have serious repercussions on industry and put pressure on inflation. The power utility came under heavy criticism for passing on costs of its inefficiencies to desperate consumers, most of who had little capacity to pay.
“It was also demonstrated that there is no direct link between electricity charges and actual (power) usage and that sometimes there is even an inverse relationship between the level of production and utility bills whereby a there is a decline in production and an increase in utility charges,” CTC.
The Postal and Telecommunications Regulatory Authority was also criticised over its role in providing service, charges and infrastructure development given the current high cost of accessing ICT services.
But Potraz said it was trying to manage prices by benchmarking them to regional standards.
But it said it has struggled to ensure service providers shared infrastructure.