Friday, March 29, 2024

Electricity tariffs should not be used to increase prices of goods and services-ZESCO

Share

ZESCO Managing Director Chitundu
ZESCO Managing Director Chitundu

ZESCO has said the recently announced hike in electricity tariffs should not be used as a scapegoat to increase prices of goods and services.

ZESCO managing director Cyprian Chitundu said the 25 percent tariff hike which was recently announced by the Energy Regulations Board (ERB) was minimal and that it would be exploitative if other goods and services providers use it as a scapegoat to increase prices.

“There is no way prices of bread, transport by minibus owners or rentals should go up. These tariffs are not out of this world,” Mr Chitundu said during a media briefing at ZESCO head office in Lusaka yesterday.

He explained that the corporation has not increased its tariffs since 2010 and that the hike had been necessitated by various factors including inflation, the volatility of the Kwacha as well as the high cost of importing equipment.

Mr Chitundu said ZESCO is particularly affected by the prices of commodities such as copper, steel, aluminum and oil that have been steadily rising over the last few years worsened by the exchange losses of the Kwacha.

“We have to take into consideration many factors to ensure our business is viable so that in turn we can also improve our service delivery to the people. If we sit idle, we can’t put a stop to the load shedding and we cannot fight the power deficit,” he added.

ZESCO has embarked on several projects to improve its generation capacity to match the increasing demand created by new mining projects and consistent economic growth which continues to push the country in a power deficit as demand outstrips the company’s ability to supply.

Mr Chitundu said in order to meet the rising demand for electricity, ZESCO requires to spend approximately US$5 billion in new generation, transmission and distribution infrastructure countrywide.

The target was to eradicate load-shedding which was why the company increased the tariffs to supplement its revenue base with externally sourced funds from corporating partners such as the World Bank, African Development Bank and European Investment Bank.

“We are mindful that these changes don’t hit the people’s pockets. Despite these changes, people who want to use charcoal, kerosene will be paying more. The tariffs are still lower than what people pay for their mobile phones,” he added.

Mr Chitundu said ZESCO was responsive to customers’ demands as evidenced by the high amount the company pays to independent power suppliers and still sells the commodity cheaply to the domestic users.

Under the newly revised tariffs which will be effected on July 1, the domestic users consuming power from 100 kilowatts will now be paying 19 ngwee from 15 ngwee while those in the 300 kw bracket will pay 31 ngwee from 25 ngwee.

The ERB has allowed Zesco to increase electricity tariffs for domestic consumers by 24.63 per cent effective next month.

The increment would also see tariffs for commercial consumers increase by 15.38 per cent, 19.49 per cent for small power and 5.11 per cent for large power while social services would pay 15.38 per cent.

27 COMMENTS

  1. what rubbish.
    in these times no one is running a charity.we have to make money and when the factors of production go up,so does the prices.
    Chimbwi no plan!!!

    • Not even a monkey called Engineer (Australia) will follow your advice. Who are you to advise business on their pricing structure?

      Cost of production of goods and services is always passed on to consumers and electricity is one major cost

    • Well why has Zesco increased the tarrif in the first place? If it is to make Zesco meet its operational costs, then I will increase my prices by 25% too .

      This kind of rhetoric can only be blurted by stupid idi0ts in PF who have no understanding of the domino effect any increase in energy prices might have on small businesses and tuntemba. Instead of just increasing the tarrif and justify , then shut up and let the businesses think for them selves what to do, he has in effect suggested that those businesses affected increase their prices to meet their operational costs.

      PF has brought back price controls indirectly by issuing such statements threatening the business community. No wonder people are busy syphoning the forex and shipping it abroad fearing price controls.

      Viva…

    • @Gen

      Wow ! I am humbled by your take on your fellow PF idi0t. Its encouraging to note that you are slowly waking up from the “Donchi Kubeba” slumber.

      Keep it up @ Gen!

    • @Wanzelu – I totally agree with your statement in paragraph one. Why can’t we also increase by 25%. Did Chitundu do Engineering Management at University? I am wondering….

  2. How did this business illiterate f00l end up as ZESCO Managing Director? Is he from the North?. Somebody tell this man that all businesses have energy as one of their costs/input in operating their businesses. This will in the end reflect in the prices of goods and services.

    • Mr. Chitundu, you are talking absolute crap. Are you saying that in addition to 35% Corporate Tax, a multitude indirect taxation schemes, local authorities licencing and myriad of other semi-legal extortionists demands, we are now also required to subsidies your company inefficiency and incompetence with 15% of our earnings? Grow up and learn how business operates jerk.

  3. How can it be that the MD of Zambia’ largest government owned corporation does not understand the basics of business?

    Sir – an increase in power costs, however minimal, impacts industry and has a spiral effects on the cost of all goods and services! Where do you think the additional money citizens and companies will be paying zesco will come from?

  4. This is crazy, how can ZESCO be commenting in sure a manner. Really we have a leadership gap in this country. PF you found essential commodities reasonable at the time of taking over govt for MMD. Let us look at the price of 2kg sugar, in 2011 it was between K7.5 – K8 per 2kg now under PF it is costing K20 hardly two years in power. What a shame….

  5. Is this the calibre of top managers in Zambia? This man must be a real joke and how did he land this ZESCO job?

  6. It is alright for ZESCO to justify the adjustment in the electricity tariffs but totally wrong and unethical for ZESCO to tell the business community what to to with their overheads. Chitundu, there is a big difference between education and skills learning, and I think what is keeping you at ZESCO are your skills in electrical engineering but as for education you seem to have have little left in you. Lastly learn never to parade your ignorance in public over issues you ill understand.

  7. These are the empty suits we are always talking about here is an MD of a big corporation. …who doesn’t understand what a hike in even 12.5% can do to a SMEs bottom line.
    This man has overstayed and should have been relieved years ago. …the corp. Is in need of fresh blood not these fat cats.

  8. This is the CALIBER of PF Senior Managers at Managing Director level
    Simple economics. Has production cost gone up because of the electricity tariff hike? If yes, what happens to prices of the products?

    • He has brought shame on the Engineering fraternity. We, other Engineers understand FACTORS OF PRODUCTION even from our limited Management lessons. But why can’t he??

  9. Can someone please enlighten me when was the last time this parastatal was audited? Don’t they have to present their financial statement to Parliament or reveal their financial statements? Let the public see how their electricity supply company operates.

    Let us be transparent

  10. Chitundu sounds like a moron when he says ZESCO is affected by metal prices – doesn’t he know that industries and homes too are affected when the cost of energy goes up, meaning everything else must follow the same trend including salaries for workers?

  11. Bushe bafikala bamo i fail to understand, they even tell their wives ati honey im going for work but only to come and publish his stupidity ati Zesco MD my ass, yaba i have no kind words for this foolishness its too much you have killed us bafikala. Dr Mwanakatwe at Zamtel pliz dont follow suit because you are the only credible MD running GRZ institutions

  12. Malabishi!and you call yourself ZESCO CEO.Every increase on power has a trickle down effect ba bwana; just like fuel.For industries production costs go up and who do you think will cushion that?May God deliver you CHITUNDU.

  13. if cost of production goes up due to electricity tariff increments doesn’t this necessitate an increase in the price of goods and services? quite a daft argument!

  14. I suggest that Zesco look for a supplier to supply power guards at a Cheaper price,like the way it was done with bulbs, to sell to its customers to avoid unnecessary litigations and costs.This load shedding is a going to take sometime and measures of this nature should be considered looking at an ordinary Zambian.

Comments are closed.

Read more

Local News

Discover more from Lusaka Times-Zambia's Leading Online News Site - LusakaTimes.com

Subscribe now to keep reading and get access to the full archive.

Continue reading