Electricity Users Reject Proposed 49 percent Price Increase

Electricity Users Reject Proposed 49 percent Price Increase
ZESA HQuarters

Companies are struggling to pay electricity tariffs at the current rate as evidenced by the US$1 billion consumers owe Zesa

Godfrey Marawanyika and Chengetai Zvauya
A PROPOSED 49 percent hike in electricity prices by Zimbabwe’s state-owned power utility, Zesa Holdings Pvt Ltd., has been rejected as unaffordable by industry bodies representing farmers, miners and manufacturers in the southern African nation.

The Chamber of Mines, the Confederation of Zimbabwe Industries and three farmer organizations want Zesa to improve its operations before raising prices, the groups said. “Zesa needs to be restructured at all levels for cost containment that matches its reduced levels of electricity generation and the current economy,” they said in a joint statement handed to reporters Tuesday in the capital, Harare.

Zimbabwe’s economy faces its worst-ever liquidity crisis, with both the government and some private employers battling to meet wage bills and stave off company shutdowns. The struggling power utility is meeting about half of the country’s 2,200 megawatt electricity requirement and using imports because its aging thermal plant at Hwange needs new equipment, while its Kariba hydro-power plant is confronting a record water shortage that may see production halted in February.

No industries can afford the increase, the organizations said. “Indeed, some of the companies are struggling to pay electricity tariffs at the current rate as evidenced by the $1 billion consumers owe Zesa,” they said.

The responsibility of ending Zimbabwe’s power deficit lies with Zesa, the industry groups said. “Inefficiencies at power stations need to be improved, especially Hwange which we understand is operating at about 21 percent efficiency,” they said. Plans to add 200 megawatts to the grid by importing costly diesel generators were short-sighted, according to the statement.

Calls to Zesa’s Harare headquarters seeking comment weren’t answered.- bloomberg.com

Follow us on Twitter on @FingazLive and on Facebook – The Financial Gazette

Connect With Us

Fingaz Polls

CEO term limits…good or bad idea?