Zesa scores an own goal

THERE are moments when something appears obvious or certain such that any divergence from this will appear like a fluke.
This was the case when Barcelona Football Club travelled to London for a date with Arsenal Football Club last week.
Most soccer pundits were putting their money on a Gunners’ rout save for the Arsenal supporters who were rooting for their team.
At the end of the day Barcelona were humbled and Arsenal and its legion of fans were on cloud nine after earning bragging rights through a deserved 2-1 victory.
Our power utility, Zesa might be facing the very same dilemma of a monopolistic giant that is ailing despite lack of competition.
This is quite surprising for an organisation which boasts clientele in excess of 500 000 households and one which is operating in a dollarised state.
Surely, their work must be cut out for them from the new CEO down to the technicians and front office personnel who interface with the public.
Failure by the parastatal to manage the power distribution efficiently has come at a cost to the economy at corporate level and various sectors such as agriculture and mining.
Assuming each and every resident is paying a minimum electricity bill of US$40, the company can afford to raise not less than US$2 012 000 monthly.
This is withstanding the fact that this is the minimum charge and with proper management of the business, residents can be charged efficiently without guesswork taking precedence over rationality.
Irrigation farming can no longer be relied on in the country despite the fact that sugarcane production used to be dependent on it 100 percent, wheat production 75 percent, maize production 35 percent and fish farming 6 percent.
The absence of electricity means the aforementioned sectors are so exposed. This was witnessed last year when wheat prices rose in Russia, and the Zimbabwean market sneezed indefinitely.
On average, using purchasing power parity, confectionery prices, notably of bread, are relatively high as compared to regional prices due to the absence of a reliable power supply.
The multiplier effects of an inefficient Zesa are so far reaching that even the water crisis hitting Harare and its environs of late can be attributed to the parastatal besides the shortage of chemicals to the treat water.
In South Africa, their equivalent Eskom, is said to have the lowest electricity charges with some parts of Gauteng consuming electricity for free.
In spite of all that, Eskom’s former CEO, Jacob Maroga, was relieved of his duties following accusations of incompetence, which followed the power blackout that hit the whole of South Africa in January 2007.
The nation was pushed into a panic mode, with the 2010 World Cup around the corner, even aggravating the pessimistic view that the nation already had in their power utility.
For every five people in Zimbabwe, four strongly feel that they are not paying for their actual consumption of electricity and for every 10 households in Zimbabwe, about four do not take their electricity bill seriously.
This is certainly unhealthy for an economy that might be more desperate to recover than any other economy in the world.
This might be evidenced by its failure to generate enough foreign currency, notably in an economy which is dollarised.
When foreign currency is mentioned in Zimbabwe, it assumes a fundamentally different meaning from one that might be derived if it’s mentioned in a different nation.
In other nations when they refer to foreign currency what comes to mind is money to import commodities or support their currency. In Zimbabwe, it means having to honour national commitments which include but are not limited to salaries, defence budget, and other obligations as they may fall due.
Recent reports coming out that Zesa is disconnecting power for all who owe it might not augur well for the already restive clientele which has lost confidence and electrical gadgets through unheralded power outages.
The management at Zesa sound so disdainful of the directive which was given by the energy ministry for them to charge residents amounts which range from US$10 to US$40 depending on whether one is from the high- density or low-density suburbs.
It was genuinely economical that such low figures based on estimation were not to be sustainable in the long run but in the same vein, Zesa cannot afford to override the ministerial decision by claiming that those US$40 do not count in their approach to business.
The parastatal is claiming that they have a business approach to making profits unlike the minister’s decree, but how do they expect to operate with a profit motive when, firstly, they are failing to provide the service.
Secondly, how is this possible to achieve this given the average salary levels obtaining within the economy?
It is sincerely a case of an “own goal” by the power supplier to believe that the best way for consumers to comply with their inefficiency is by disconnecting power.
There have been arguments that the absence of vehicles to ferry technicians to different suburbs has been a major problem in technicians attending to faults yet when it comes to disconnection they are very swift and efficient. How are they getting around to carry out the disconnections?
It is a true case of a friend who lends another friend an umbrella during winter only to take it back when the rainy season starts.
Zesa is simply complacent, its unbundling and the different strategic business units that were created can be efficient without taxing the nation.
The economy performed dismally in the initial 45 days of the year, Zimra managed to amass only US$156 million against a target of US$252 million.
There is no space for bailing them out and at the same time they cannot increase electricity rates like what was experienced recently in order to stay afloat.
The economic outlook in terms of revenue collections remains gloomy because it is being exacerbated by the demands by civil servants for a wage increase when the existing wage bill is already exceeding 70 percent of Government’s budget.
Any analysis of Zesa operations would show that it could only be technically sound if one is to factor in the power generation capacity at different power stations.
It is a fact that Hwange Thermal Power Station has been operating at well below its capacity due to failure to maintain the units there since they demand a significant sum of foreign currency.
This has seen the actual power output sitting at below 45 percent of the potential output.
However, failure by Zesa to offer an up to standard service even in the midst of inefficiencies at generating stations cannot be tolerated.
It would take an average of 30 days for the parastatal to replace a stolen or dysfunctional transformer.
It is certainly unjust for Zesa to pass the burden to consumers for their failure to act timeously in their billing system, we really cannot thrive on approximations of accounts for determining usage and even energy savers cannot be considered an efficient alternative in the long run.
Economic development has been significantly curtailed, the ease of doing business is so compromised and power shortages do have a serious effect on the confidence levels within the economy.
Even our border towns, the first port of call for any visitor to the country who is not flying, have not been spared.
If one crosses the Limpopo River from Beitbridge Border Post into South Africa and onto Musina they see a contrasting picture.
The South African border town shines brightly in the evening, while it’s pitch dark on the Zimbabwean side.
This is supposed to serve as a lesson to Zesa that the aesthetic value of a town or city is measured not only by economic activity but also the social life within that city.
This will definitely act as a springboard to lure tourists hence increasing revenue flows.
Thank you and God bless you.
Christopher Takunda Mugaga
Head of Research
Econometer Global Capital
l [email protected]
+263 772 340 353, +263 776 062