Zesa owed $400 million

Published: 15 July 2014

Power utility company Zesa Holdings is owed over $400 million with the major chunk of the debt held by domestic consumers who received a blanket amnesty just before the harmonised polls last year, parliament heard on Monday.

Presenting oral evidence before the parliamentary portfolio committee on mines and energy chaired by Zanu PF Gutu Central legislator Lovemore Matuke, Zesa chief executive officer Joshua Chifamba said farmers owe $70m while the domestic debt had risen to $322m.

"We did a write-off for agriculture mainly because we are all aware of this sector's contribution to the national economy. The total debt written off was $80m. For domestic purposes we wrote-off $90m that is $160 per household," said Chifamba. "But as of now the farmers' debt has risen to $70 million and that is where it stands. We really think that this money needs to be collected."

The state-run power supplier was then owed in excess of $700 million by both its domestic and commercial customers. Of that figure, domestic users were accounting for close to $300 million, with indications the figure had since been surpassed as the country's economic problems continue to deepen, affecting household income.

Chifamba said some of the debtors, like Harare City Council, who receive power for essential services like water, have not been forthcoming. He said ministers and politicians have agreed to pay, but their payment plans were based on a longer period that would see the power company securitising debts.

"The other issue is debts by essential customers, like Harare City. They have not been paying and we will not disconnect them because they supply water and sanitation services. The same applies to Sable Chemicals, they have challenges as well, so that is where we stand with debtors," the Zesa chief said. "As for individuals, we did enter into payment plans with customers, these have been honest and include ministers, members of parliament and other influential people. We are agreed on payment plans that are going on well, but the problem is that the payment plan is on a longer period."

Chifamba said securitisation is when the state power supplier goes into an arrangement with banks to garnish accounts in order to off-set an outstanding debt.

In a bid to deal with the country's power supply problems and the ensuing payment problems, Zesa, Chifamba said, had turned to pre-paid meters with almost half a million households now on the programme.

On domestic debt, Chifamba said the utility company was trimming off a certain amount of money from customers as part of a payment plan," Chifamba said.

"On the issue of domestic debt, it is currently standing at $322m. The pre-paid metres which we installed reach up to 429 000, that is 81% covered so far.

While there have been muted howls of disapproval at senior management's salaries at Zesa, Chifamba refused to divulge the salaries but revealed that the utility company spends 25% of revenue on wages. With an average power generation capacity of around 1 200 megawatts, Zimbabwe has a power shortfall of between 600-800 megawatts depending on time and demand.
- Zim Mail

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