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Thursday, May 28, 2020

ZESCO targets to raise K16 billion in first year of higher tariffs

Economy ZESCO targets to raise K16 billion in first year of higher tariffs

Zesco Managing Director Victor Mundende

ZESCO Managing Director Officer Victor Mundende has justified the 91% average retail electricity tariff hike proposal.

ZESCO has formally written to the Energy Regulation Board – ERB suggesting an upward adjustment to retail tariffs aimed at funding capital expenditure.

Mr. Mundende said during a presentation in Lusaka that ZESCO had proposed to increase retail tariffs to K1.87/kWh from 93 ngwee/kWh for residential customers.

ZESCO also proposed to do away with the monthly fixed charge and incorporate them into the increased tariffs.

Mr. Mundende confirmed that ZESCOs operational costs have swelled to K13 billion in 2018 from K3 billion in 2011.

He said raising an estimated K16 billion in the first year of implementation of new tariffs will help improve company operations.

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  1. I am not surprised that our once beautiful country has gone to the dogs or that the dogs have invited themselves to the country. In the first place, does Mundende need a bodyguard? Secondly are these abnormal tariff hikes justified considering that 80% of this country’s citizens are jobless and poor? Was this demon called PF created to strangle the poor and suck the last drop of blood from the 10% middle class?

    • Government is broke. They need to find money bybsny means. They borrowed billions of dollars which they spent on campaigns, on presidential jets and to enrich themselves through corrupt contracts. Now they must squeeze the poor citizens to repay the debts. They, themselves will not feel the effects and won’t contribute even a ngwee. But the Zambian on the street will suffer.

  2. Shameful for ZESCO to brag about raising all those billions. A parastatal like ZESCO is there to ensure that people and the nation are served and their lives made easier at reasonable cost. This is similar to RATSA who boast of raising money instead f boasting of improving road safety which is their main focus. Next time we are going to hear of a headmaster boasting of how much money he has raised from school fees instead of how many children he has educated

  3. You are the most incompetent director to ever run Zesco. Yours is premised on tariff increases and no other alternatives to raise capital. The narrative of always increasing tariffs to justify ineptitude and gross incompetence is what is killing our economy. What we forget is the ripple effect this has on all economic activities as other factors of production will increase in retrospect. When are we going to be serious with running our economic affairs in this country? The back stops at all of our door steps, we vote for riffraff’s and cadres and we expect them to do magic. This is a travesty on our part, what a shame.

  4. Operational costs have risen to so-so billions of kwachas so need to increase tariffs is necessary!! And you call yourself a managing director! Everybody knows your company is moribund under your watch because of caderism..insoni ebuntu..how many passengers are in that company drawing huge emoluments brought in by politicians!? Mismanagement of the worst..

    • A good manager looks for ways of reducing operational costs and not looking for more ways of getting money to handle the high operational costs. Fire him!!!!

  5. ZESCO must look at why the cost has increased from K3 billion to K13 billion. They should cut of what is not adding value to the business. Things like maintaining PF cadres on their payroll and financing PF campaign are but selfish acts that just benefit few individuals.

  6. That is hy there is a deliberate GRZ policy of keeping the public ignorant on domestic solar power…….so PF can milk zesco for campain funds…..

    Any other GRZ would have made sure atleast 50% of new builds incorporate solar power to reduce climate change, not these lazy crooks in PF who only know borrowing, tenders, and campaining

  7. When business men run the country this is what happens… unfortunately the majority of the poor Zambians just dont have a clue. As long as they drink to jili jili then life goes on…

  8. Zesco Tarrifs should not be increased already they are already high,why should poor zambian people pay for Mr Mundende lift at his residence

  9. Remember when the chinese were spotted at zesco offices, thats who is taking the bulk of zesco revenues to help pay for the loans to repair our infrastructure. Why cant someone tell the truth.

  10. Mr. Mundende confirmed that ZESCOs operational costs have swelled to K13 billion in 2018 from K3 billion in 2011.

    What are you doing about this wastage which had swollen to these levels? Zambians cannot go on financing this never ending theft and corruption.

  11. The Zambian voters will remember all these injustices in 2021. Borehole levy, presidential jet, fire tenders, ambulances, delay of salaries, just to mention a few. PF you have a lot going against you.

  12. I wish you knew how we are struggling with the current price of electricity. Come and stay with us for a week and see how the power is still very expensive. How can you increase when we are looking to you for reduction.

  13. It’s not enough to say the operational costs have gone up from k3bn in 2011 to k13 in 2018. Outline the factors that have led to this increase. Is it personal emoluments? Administrative costs?
    Operational costs (production)? Or indeed is it inefficiency? Don’t just give a blanket figure. Zambians are entitled to know why the costs have gone up. Mind you ZESCO is a public company, it belongs to all Zambians. Like they say, “The devil is in the detail”.

  14. Pay up or use other options like Generator, Gas or Solar or better still cow dung. Yes, cow dung!

    The cost of refusing to charge cost reflective tariffs is the rolling blackouts in South Africa, East Africa, and West Africa. Those complaints of bar music which PF Councils have now extinguished will pale in comparison to tick toking of gen sets next to windows. With mines using almost half the power, a good deal of FOREX will be captured back too. And 80% of Zambians without electricity in homes should not be subsidizing 20% with it. Subsidies just suck. As they say, when it’s free, you are fu…d!!

  15. ZESCO managing director has proved to be very dull. He may have academic intelligence, but is very dull. To him is just a job. Zambia is strategically located, therefore it is easy to export power. It is the export power which is supposed to lower the cost of power within Zambia. Despite ZESCO over employing engineers by 92%, the services are very poor. One wonders what all engineers do in ZESCO. CAPCO, now called Transmission, part of ZESCO Transmission & Generation had only one regional Engineer. I feel sorry for young engineering graduates who join ZESCO. Very few will practice engineering. The CEO is failing to make good use of intelligent engineers in training who are not doing engineering to reduce the cost of operation. That is one of the reasons of having engineers.

  16. Awe sure and this coming from a government that claims to be pro poor!… Zesco is certainly not making any losses if it can afford to pay an over blotted workforce especially in departments like customer care where workers without any trade get a whooping K15 000 net per month and reportedly only work for 4 days in a week per shift because there are too many of them. On top of that the same Zesco employees are even exempted from paying for power in the houses they live in by simply submitting their meter numbers? Something has to change because even those in power will not feel the pinch since they gave themselves a 100% salary increment while denying the poor civil servant even a 4% increment and these are the bulk of the Zambian formal working class

  17. Its well beyond the economics and at variance with tariff compliance environments Small Small adjustments towards those costs and then retrace the Financials ba mukuba

  18. CHANGE or Movements in CPI’s over the periods 2017 to 2019 Those other X FACTORS including the COSTS into the tariff decisions REVIEW

    The LRMC approach over those periods then consider the broader macro economics view including the power market structure and technologies and your mix in the broader energy sector sense

    Small Small adjustment and retrace the balance sheet into your Good business plans and ambitions to fit the Zambian economic and regional prospects first as opposed to simply exporting as above though consideration of payback will entail those PPAs to those matched to FXs positions but wiser to leverage power for Zambian economic progress to further reduce the same costs to locals

  19. We do not also remove Fixed charges because by nature capacity is made available to those not using power but yet on the grid and it goes towards meeting the Fixed costs or Operational leverages including the Financing for infrastructural Investments

    In this case we will need to do small small since we are already in parity terms cost reflective and costly except our costs curves

    There is a death spiral danger for the utility if not well modeled also as costs and increase with revenues and customers dwindles

    All in all the tariff increment is way beyond the economics and outside the utilities energy sectors outlook and will reflect issues below revenues lines cross sectional and…

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