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Eng Chifamba said it would be unfortunate if the CZI went ahead with the issue to court, which could result in the setting aside of the increase.
He said this would make it difficult for the power utility to continue supplying power at a loss, which will ultimately result in people using generators.
“People have to know that the cost of running a generator when there is no electricity is 45US cents more than what they are supposed to pay Zesa.
“There are also high chances that industry will be losing revenue of about US$4 a kilowatt hour if we don’t provide electricity. We are sensitive to what is happening, but if we don’t do anything there will be more problems when we stop generating electricity,” he said.
ZESA
Eng Chifamba said even at 7,53 US cents per kilowatt hour, the power utility was incurring losses.
He said since 2009, the price of coal, which takes about 45 percent of the coal structure at Zimbabwe Power Company, had gone up from US$17 per tonne to US$30 per tonne, while the price of diesel moved from 90 US cents to US$1,32.
Eng Chifamba said electricity tariffs were likely to go up to around 16 US cents per kilowatt in four years time after the completion of refurbishment of Hwange and Kariba Power Stations.
The Zesa boss said while it was true that the tariff increase would trigger a surge in inflation, he said there were high chances that inflation would even go higher if industry used generators.
Eng Chifamba said all stakeholders had been consulted before the tariff hikes.
He said the power utility was owed about US$449 million with 46 percent being owed by domestic users, 30 percent industry and 10 percent Government.
In a statement yesterday, CZI said the electricity tariff hikes by ZETDC were unsustainable, unjustified and illegal.
“This shows a lack of understanding or empathy with the nascent and fragile economic/ industrial recovery underway since 2009.
“The inflationary ramifications of this purported increase constitute a disaster in terms of competitiveness of local businesses and can also herald a spat of price increases throughout the economy,” CZI president Mr Joseph Kanyekanye said.
He said the Zimbabwe Electricity Regulatory Commission was not properly constituted, which resulted in the commission approving unjustified increases.
ZERC last week approved a 31 percent electricity tariff hike effective from Tuesday this week.
The new tariffs were approved after consultations with Government.
A similar increase was reversed in March this year after Energy and Power Development Minister Elton Mangoma said there was need for further consultations.
Online Reporter