President Edgar Lungu has directed the Ministry of Energy to defer the Tariff review application made by power utility company ZESCO to the Energy Regulations Board.
Energy Minister Mathew Nkhuwa announced the development and said the President consulted widely on the application.
Mr. Nkhuwa said after consultations, President Lungu has listened to the concerns raised by various stakeholders and members of the public.
The Energy Minister has since advised that all concerned institutions should accordingly suspend the tariff review process with immediate effect.
He said Zambians have voiced out their concerns on the proposed application for the tariff review by ZESCO and its implications on the general cost of doing business.
On 9th March 2019, ZESCO applied to the Energy Regulation Board (ERB) to revise retail electricity tariffs upwards.
Among the proposals include the downward adjustment of the lifeline tariff from 200kwh to 100kwh and elimination of the monthly fixed charge for residential and commercial customers.
ZESCO was basing proposed adjustments of tariffs on prevailing economic conditions such as the rise in the prices of goods and services and fluctuation of the Kwacha against the dollar that they say has contributed to increased operating costs.
ZESCO’s equipment and supplies are procured in foreign currency, therefore, weakening of the Kwacha against the dollar is making procurements expensive for the Parastatal.
Am smelling a fish here. Kkkk
On 9th March 2019, ZESCO applied to the Energy Regulation Board (ERB) to revise retail electricity tariffs upwards.
Among the proposals include the downward adjustment of the lifeline tariff from 200kwh to 100kwh and elimination of the monthly fixed charge for residential and commercial customers.
ZESCO was basing proposed adjustments of tariffs on prevailing economic conditions such as the rise in the prices of goods and services and fluctuation of the Kwacha against the dollar that they say has contributed to increased operating costs.
ZESCO’s equipment and supplies are procured in foreign currency, therefore, weakening of the Kwacha against the dollar is making procurements expensive for the Parastatal.
LAZY LUNGU directs this and that ….what a useless man, you wonder why he has ministers ..he was there when ZESCO was applying for this, when are you going to direct ZESCO to streamline and stop using them as a cashcow to buy cheap transformers from China in return the company bribes you with a school in Petuake.
I don’t understand anything.
Is Ba Edgar telling Zesco not to increase electricity bills?
Nostradamus – maybe if you put that bottle of whiskey and sober up for 24 hours you will understand …
To defer doesn’t sound good at all. It’s like a hide and seek game..a matter of kicking the can down the road with a sinister motive! Should have simply requested ERB and ZESCO to be reasonable in proposing their new rates…to be implemented as and when approved..with the approaching elections bearing no effect in the whole process!
kicking for after the elections like last time they lied about 75% increment …they never streamlined..you have five workers at times doing a job that requires 2 workers if efficient strategies were deployed…then you have directors driving top of the range personal holder company vehicles.
The price raise was sucide for PF and lungu……
In return for this reprieve , expect fuel prices to raise
This is wrong!
In a Free market economy, the president has no right to issue directives! Only the market forces of Supply and Demand should dictate!
As usual in a dictatorship where small minds have no freedom and independence of thought process, some simpletons are already celebrating this as a sign of a listening president! My foot! That is cheap politics and his only interest is political survival! Go ahead and give him the vote in 2021. You will have a 1000% hike in tariffs! The answer is to restructure ZESCO to make it more efficient!
So everything is ECL
Thank you people of Roan and Kambwili. Without the defeat PF suffered in Roan, Lungu would have allowed Zesco to effect their senseless increments.
Thank you people of Roan and Kambwili. Without the defeat PF suffered in Roan, Lungu would have allowed Zesco to effect their nonsense
Even in Countries with highest TARIFF DEFICITS tariff incremental have not be that increment The case in mind is Bulgaria that approached this sensitive tariff increase in the most macro prudential manner after the citizens voiced out the economic implications of such massive and huge tariff increment across the various sectors of that economy
The suspension is not enough it should be modeled from the scratch and the fixed charges allowed to meet the capacity made available to those even not consuming
What would be interesting is to allow Zesco to explain how they arrived at the average 113% increment and what the effects of the suspension are. The fear of losing power and not the reasonable justification drive African leaders into making populist decisions. I can confirm that Edgar didn’t consult me, is there anyone here who was widely consulted?
Problem we have is not analyzing issues in depth. Do we know how much it costs a Zesco to generate or buy power we use at the moment. ? Let’s do some research before commenting ignorantly.
I think it is a timely decision by the President in a wrong way, as you say there is need for research which Zesco as an individual entity appear to have conducted and made the unreasonable proposal, those tariffs are unaffordable by the majority Zambians and businesses, immediate social unrest would have been one of the immediate result which is in no one’s interest including Zesco itself.That k19billion projected revenue in this depressed economy where was it going to come from..? The solution lies on two fronts, firstly Zesco is being fleeced and mismanaged, this alone can reduce costs and enable Zesco save billions, secondly reasonable spread out tariffs are easier to absorb and allow for adjustments by consumers and industry without sending an earthquake in the economy…..
Some of us are expats in these issues and we made our submissions to ERB, what we were expecting were public hearings at which we could have defended our submissions. By curtailing debate he has killed so many ideas that could have transformed the electricity sector, besides we wanted to hear out Zesco.
The issue is how zesco is apparently managed.
Our constitution needs amending to compel the presido to hold press conference at least once every quarter. Too many issues r left hanging, citizens shud b blamed for believing AC, Blomberg, Prime TV etc…..why is there so much fear to hold a genuine press conf.? The longer it takes, the more “awkward” questions will pile up, How is he going to cope then…? Cadre violence, corruption allegations, alleged “ethnic cleansing” in civil service, maize gate, toll plazas, POA issues, shielding murder suspects, real debt burden….
Good news ,people were complaining that adjustment would have prompt commodities prices to escalate.
I am sure Zesco should have briefed the President about its intentions and at least given details to the minister. The President appears not to have read his reports well and now wants to appear to be a hero. Maybe he allowed Zesco only to come and DIRECT them not to implement, so that he appears to be a consultative and listening President. Look, either the President is ignorant or he saw political mileage out of the whole episode.
Or they fear to expose Zesco to scrutiny by Zambians.
Unfortunately for us, Trib.als are NO OPTION for Zambia. But I am certain that a good alternative leadership will present itself before 2021. If not, I shall be THE option.
MINISTER IN ZAMBIA IS JUST A SPOKESPERSON , WAITING FOR PRESIDENT DIRECTIVE LOL , EVEN MY ILLITERATE GRANMA CAN DO BETTER AS MINISTER IN ZED THEN
it was clearly a miss and this is a face saver for the faultily because their write up was not correlating with the energy transformation 2030 and also the energy economic outlook 2019 including the IMF forecasts
They should sit down d address their strategies both operational financial and other and transform their business segments to add more profits and grow its customer base without adversely loosing that
They can do better modelings and reasoning including best forecast to support their business objectives It should come from Zesco employees themselves and save more to transform the utility into what was said world Class utility in 2000 They have the capacity to stem…
the Financial and Operational leverages its about the Financial Transformation in-house without further additions of Finance costs getting the best use of manpower and resources to grow the “EBITA” by some factor of 2 or 3
There is need also to control and set the CAP on IPP auctions or Contracts and support market based initiatives because certain technologies are costly as pass-thru to the utility and are golbally being phased out
The current tariffs in parity terms are way above the global best costs at those WACC and therefore some cost saving measures must be in view
So ERB is not so independent after all. They need to consult the minister every time they want to hike prices of electricity or fuel so why even waste time having such an organization in place. Let just the minister or PS announce every time they want to increase anything.
Suppose ecl didnt intervened and ERB went on to increase the tarrifs all the idyiots against this move would’ve been blaming the opposite. Can one of you zealots tell me whats wrong with govt stance not to allow the increament to be effected.
Brace for blackouts, grid collapse and wanton damage to appliances. Take care too as your properties and plants will burn from the unstable supply. But no problem really since it’s just the 20% urbanites and the very few ruralites who have bullied the President for their privilege of give away price power.
Rather than cry foul to ZESCO as this rapidly escalates, get off the grid to solar-gas or have a coal power plant like Dankote. It’s not funny when unstable supply scorches installations. Lifetime investment goes up in flames just like that. Hope the President reminded those consulted about the consequences of such bullying especially those wheat farmers who buy a new Hilux every season rather than pay fairly on power.
#18 Razor, we are ruled by DIRECTIVES from the most intelligent Zambian. He is the most intelligent Zambian by virtue of being elected President of Zambia he us the expert in police work, expert in economics, expert in law, expert in agriculture, expert in finance, etc and now expert in tariffs. What beats me is that with this super intelligence he was not aware of the application by Zesco or its implications.
But then even Trib.al Hacks us the most intelligent individual in trib.al upnd whereas Mr Lungu is the most intelligent leader both in his party and in the country. And also Trib.al Hacks adds the dimension of being a trib.al, a very big disadvantage in Trib.al Hacks fruitless ambitions.
“And let me digress to point out that Mrs. Nalumango who comes from Northern Province never uttered a word when after 2016 elections Bembas were beaten and their properties destroyed in Southern Province.”
Kikikikikiki ….. are you guys really serious about wanting to rule this country? I mean you trib.als.
This is a baseless excuse to increase tarrifs by zesco, why doesnt Zesco cut down on employees and also reduce salaries as well, not putting all the weight on the public. It wants to reduce the lifeline tarrifs, why not do away with the basically free units to all permanent employees because that is a cost to tax payers. If only the companies we work increased our salaries by 50% annually.
They can steel re look at other revenue enhancing and saving measures towards the efficient working capital for operations it’s like re-looking at the revenues and net profit then vertically and horizontally focusing on those revenue lines on their customer base and costs much needed for cutting substantially and still remain a world class utility It’s also a fallacy that cost reduction is labor only in fact the best resource they have is human resource which they wold need to leverage and increase those revenue and energy mix and business segments it sometimes doesn’t involve those massive capital outlays
They can achieve massively towards the 113% reduction in costs without further…
Financial commitments and grow the Business The approach should be in short-term to long-term effective energy solutions and technologies that will turnaround the fortunes of the company at the same time maintaining the capacity to increase for future reinvestment Labour cost related will require payouts and money is the scarcity here You would rather optimize that resource both in the Short-term term an long-term