adminTHE impasse between Zesa Holdings and industry over the newly introduced special tariff is costly to the economy. It demands immediate attention.
Industry needs an efficient service provider who is sensitive to its needs while Zesa needs a co-operative industry that will help it generate and provide adequate power at the right price.
The balance between these two has never existed as far as I can remember with the industry and consumers in general more hard done by the power utility.
Reports that CZI intends to take legal action against the power utility smacks of a total breakdown in communication between the two.
Zesa has never really been in good books with industry. So much energy has been expended in fights as opposed to attention being directed towards the generation of more power for the nation.
Industry, which has been struggling to pay a US7c per kilowatt hour tariff is now expected to pay US13 cents as a guarantee that they will receive constant power supply.
The special tariff will go towards resuscitating small thermal power stations, we are told.
But industry says it will have none of it, with indications that some firms may have to folk out US$6,5 million annually in power if that happens.
I wonder what the bill at Sable Chemicals, the largest consumer, will look like.
On Tuesday, CZI president Mr Joseph Kanyekanye warned of shortages of goods in some instances and widespread price increases if the new tariffs are effected.
Zesa, on the other hand, says it will not retreat.
Mr Kanyekanye is quoted as saying Zesa failed to justify the increase during a meeting held on Monday and prior to that, the utility did not consult industry and consumers over the issue.
While taking legal action is one long process that may not help Zesa at all, something needs to be done to address the situation before it puts a dent on economic recovery.
Over the years, industry has bemoaned rampant power cuts and high tariffs as constraining production, a fact that appears lost to Zesa.
Although we appreciate and understand that Zesa is struggling financially and needs every penny to improve power supply and distribution, the power utility is in the habit of shooting itself in the foot by unnecessarily eliciting resistance and the wrath of consumers when consultations and negotiations are evidently more beneficial.
On a few occasions Zesa has had to revise downwards its tariffs, overpowered by end-users.
Experience is said to be the best teacher but Zesa appears to be daft we are almost tempted to think its intentional.
A thorough analysis of the situation should be able to bring out a win-win situation between Zesa and industry.
The utility needs to sit down with industry and find a way forward and reach a compromise on a more realistic tariff.
Maybe Zesa is trying to solve its problems by burdening the consumer when, in fact, there are routes through which the utility can become more efficient.
Pricing has always been an issue raised by Zesa as one of its greatest undoing but a lot of factors need to be considered before passing the buck to the consumer.
For instance, Mr Kanyekanye said for every dollar paid by the consumer, only 32 percent goes towards generating, buying and distributing electricity, with the balance going towards overheads such as salaries.
This is unsustainable and only shows that the power utility needs to look at its overheads and find a way of reducing these.
Some schools of thought have suggested that Zesa needs to cut down on staff, a fact that could be considered by the power provider to improve efficiency.
The Zimbabwe National Chamber of Commerce on Tuesday also warned that industry would pass any added costs to the consumer, urging Zesa to consider underlying challenges before raising tariffs.
“Efficiency levels are frustratingly low, billing system is poor, state of power generation needs complete overhaul, skills gap, top heavy structure – unless and until these and many other issues are dealt with, the tariff adjustment may be just a stepping stone to yet another review in the short term,” said ZNCC president Mr Oswell Binha.
His words are full of wisdom and Zesa should take heed.
It is very difficult to defend Zesa in many instances no matter how hard we may try.
The power utility always puts the wrong foot ahead and ends up tripping.
Everyday consumers moan of incessant power blackouts, overcharging, wrong meter readings and many other shortfalls that have made Zesa public enemy number one.
There is not a single company that does not list Zesa as the major culprit for the firms failure to achieve set targets.
Industry today says it could have increased capacity utilisation to more than the 45 percent current average were it not for poor power supplies.
Local production, which is expected to grow significantly to meet demand, is largely constrained by power outages that have proved costly to the consumer.
Both domestic and industrial users have no kind word for Zesa.
Threats by both CZI and ZNCC of impending price increases and shortages should be taken seriously.
More price increases will naturally fuel inflation at a time macro-economic stability is under threat.
An unjustifiable and higher power tariff will only compound the situation.
Furthermore, reduced production due to low power will also increase imports thus stroking inflation.
This is certainly a situation that should not be allowed to happen.
Energy and Power Development Minister Elton Mangoma was quoted as saying he was not aware of any such tariff increases. How laughable.
We encourage him to work with his management team at Zesa to improve communication, first between them, and with the rest of the stakeholders to ensure a more pragmatic approach towards electricity supply, distribution and pricing.
This sensitive issue will need attention even at Cabinet level to ensure it’s redressed once and for all.
It makes no sense for Zesa to claim that its tariffs are lower than the regional average when, in fact, such factors as consumer spending power and the state of an economy come into play.
Zesa just needs to be a good corporate citizen. One who is sensitive to the needs and demands of the customer.
Zesa is a major player in Zimbabwe’s economic matrix and the earlier it realises that, the better for all of us.
The Medium Term Plan anticipates a 7 percent annual economic growth over the next five years but it has Zesa to contend with.
In God I trust!
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Online Reporter