Former General Secretary of the National Energy Sector and Allied Workers Union Yotam Mtayachalo has welcomed the directive by President Edgar Lungu for Zesco to suspend the proposed application to the Energy Regulation Board for upwards adjustment of electricity tariffs.
Mr. Mtayachalo says the intervention by the Head of State is timely and a step in the right direction because it is not long ago when ZESCO was allowed to increase electricity tariffs by 75% on account that the country was going to migrate to cost reflective tariffs which has undoubtedly exacerbated the high cost of living and doing business in the country.
He said entertaining such an abnormal application at the time when the majority of ordinary Zambians are going through serious economic challenges would have been insensitive, immoral and not in line with the much proclaimed PF pro-poor policy.
Mr. Mtayachalo said currently only 31% of Zambians have access to electricity leaving out 7.2 million of households without power 54 years after independence which is not a success story to write home about as a nation.
He added that increasing electricity tariffs to such unmanageable levels shall further undermine the country’s Vision 2030 of achieving universal access to clean, reliable and affordable energy especially for the rural population which only accounts for a meagre of 4% of access to energy.
Mr. Mtayachalo said with the current prevailing economic situation in the country, it is just prudent that ZESCO must be innovative and look at other viable alternatives to improve its financial base such as broadening its customer base through implementing a robust, affordable and flexible repayment method in respect of capital contributions for new customer connections instead of relying entirely on electricity tariffs upwards adjustments.
He said government must equally play its positive role by ensuring that the power utility is run by qualified and competent personnel at all times and desist from exerting undue political pressure on management.
Mr. Mtayachalo has warned that failure to do so will result in these perennial financial challenges which continue to rock the corporation from all successive governments.
Way to go bwana president.
He is a hard working president who understands the plight of the poor.
Another great gesture, the unwashed masses will quickly denounce with no credible reasons.
I hope a phd
Thanks
BB2014,2016
ZESCO needs to grow its market to increase revenue and not the other way round. It’s a basic cost accounting principle for marginal growth and analysis.
By growing on the margins, any enterprise can increase its sales thereby growing its revenue … as the main provider with no competitors, it’s basically a monopoly that’s not good for consumers.
GRZ needs to deregulate this sector and let utilities within municipalities to string up. This can even be co-operatives working on JV basis with private investors.
Not all power needs to be distributed through a national grid. What happens when security is breached?? The entire country would ground to a squirt hole.
These are just 2 reasons why deregulation is needed. One for competition thus new players would enter the market and…
Continued…
These are just 2 reasons why deregulation is needed. One for competition thus new players would enter the market, expand service to cover a much larger pull of consumers using local providers and two for national security reasons … let’s roll.
Epo mpelele,
BRM
soiled BR BAMBA…..
Look at this pretender
Ati “ not all power needs to be distributed through the national grid ….”
What dumass ……even in Europe major countries have one country wide grid….and he thinks a 3rd world country ,Zambia, a country that survives on aid can have an alternative national grid ?
If you nothing to say , just read…..
Why did Zesco propose to increase the tariff is question, it may mean they need to increase cash flow for the organisation(business decision). The presidential directive (political decision)may mean hampering Zesco’s financial position and ability to run the corporation efficiently.
@Spooked … I am actually having such a great day but for your information local utilities choose to distribute excess power through national grids in advanced countries for extra revenue not that it’s mandatory.
You are such a clown; a great example of inferior export. I believe you are one of those dimwits who didn’t even fall asleep today in the NOT SO Great Britain just waiting for a baby … no other comments needed.
Shaa…
BR soiled BAMBA
Local authorities only feed excess power into the national grid , which is the only electrical highway so it sold to different customers country wide, where have you seen an alternative grid you Twit ?
@Spooked … yep!!! Just spooked as usual right below your own nose resides a “local” grid.
There are NO ALTERNATIVE GRIDS … just local ones that feed in the National Grid. Basa.
A dynamic locally run grid can be controlled at a local level and many such units can stop a national disaster if hackers were to invade the national grid.
Currently in the United States, local utilities are being modernized to be stand alone for national security purposes just in case terrorists hacked into the national grid.
Yaba … it’s like pulling teeth with some of these inferior exports.
You BAMBA , do you know what a grid is ? As opposed to local power generating station which local authorities can have ?
BAMBA thinks local authorities will provide alternative pylons and wiring to existing ones , in effect an alternative grid ?
….what an empty tin
@Spooked … please refer to 2.5 below.
Don’t blame me for your misery and misfortunes. I played no part in choosing who your father was.
Natotela …
How can yo applaud someone for stepping for getting what he said last time tariffs were increased…last time the excuse was for the tarriffs to cost reflective, now they are ZESCO says its now due to increased operational costs…they would you increase the y more they spend…a smart leader who challenge ZESCO to efficient and lean… he has simply kicked the can down the road for after 2021.
How can you applaud someone and forgetting what he said last time tariffs were increased…last time the excuse was the tarriffs to be cost reflective, now tarriffs are cost reflective but ZESCO says its now due to increased operational costs…its clear that their exxpenditure and waste is growing with every increment…a smart leader can challenge ZESCO to efficient and lean… he has simply kicked the can down the road for after 2021.
***please excuse typos in last post****
The real reason ZESCO is increasing is because its a cash cow….GRZ and corrupt PF use it like its their company…remember what AC stated last time about Lazy Lungu take out loans? Why dont ZESCO tell us how much their external debt is and to whom
THERE IS NOTHING TO PRAISE LUNGU ABOUT THIS, HE HAS DESTROYED THE COUNTRY, ECONOMICALLY IF WE WERE A COMPANY WE WOULD GO UNDER RECEIVERSHIP OR ICU IF WE WERE PATIENTS. $1=K16, THIS IS PATHETIC. LUNGU WAS TESTING THE WATERS WHEN T HEY MADE DECISION TO HIKE THE TARIFFS AND THEY SENSED THE MOOD OF THE PEOPLE AND HE IS PANTS DOWN SCARED OF HOW HH AND KAMBWILI CAN USE THAT OPPORTUNITY. PF IS A KA FINISHED PARTY AND NO WONDER THEY ARE LOSING ELECTIONS LIKE THE WAY THEIR KWACHA IS LOOSING VALUE. NUMBERS DONT LIE , TU PF CONTINUE MASSAGING YOUR EGO ICALO NA CIPILIBUKA. THERE IS ONLY UPND AND NDC ON THE COPPERBELT NOW.
Well said BR Mumba, Sr..
You mean he had no prior knowledge that Zesco had applied to increase tariffs?
By the way I forgot to mention one good thing that was included in their request that’s very important and still may require consideration.
ZESCO’s proposal to reduce power output from 220 volts to 110 volts is a step in the right direction. As much as that would create a new burden on consumers to replace current appliances, it would immediately double its capacity at payloads.
Also, as a transition, consumers maybe provided with step down apparatus in the interim at cost from ZESCO while stores would be filled with appliances at new voltage. That’s a step in the right direction.
Lower voltage means more kilowatt availability, less blackouts and more consumption at same rate of production … let’s roll.
Epo mpelele,
BRM
Somes times you look like an idiyooote that you are when you just yap….for the sake of yapping
Ba BR soiled BAMBA…….
stepping down to 110v from 240v means you have to increase current , units need the same power to operate , so you are not saving much considering the changes to have to make to existing infrastructure….
@Spooked … to the contrary stepping down power does not require much change in infrastructure such as power lines and transformers.
Many countries in South America performed such changes and it worked just fine.
Your biased reference to western countries always shows what a slave your mind has always been … nothing but an Uncle Tom.
Violence killed a journalist in the UK over Brexit hooliganism this weekend but Theresa May is an angel while 1,000 parasites killed a cadre and Edgar Lungu was to blame.
Go get a life, mate.
Cheers
BAMBA
Just slink away , you know jack about electrical power.
Stepping down to 110v means using the current which means most domestic wiring will need to be rewired with thicker conductors to carry a heavier current
As I say yaping for the sake of yaping exposes where your little brain pelelas ……twit
Just look how shallow this BAMBA boy is …….do you know why many Latin American countries changed to 110 v ????
Even my teenage son will tell you it is because their stronger more richer neighbour , the USA uses 110 v ,
You are just a loud mouth who knows nothing
@Spooked … I am not going to argue with you … like I said, I am having such a great day today, it’s ungodly!!!
Forget BRM … just search any reputable electrical engineering journal or any do-it-yourself manuals on changing from 220v to 110v and you will have the right answers you are looking for.
Trying to pick a cyber fight with me won’t solve your misery.
Cheers
Yep , I would go away if I were you instead of showcasing what a foool you really are
@Spooked … please refer to 2.5 above.
What A Sweet Life ~ B R Mumba, Sr
That was a silly suggestion by ZESCO which would have meant sucide for PF ……
It’s like some says no more eating nishima , and lungu says that can’t happen …..
Then you get bootlickers lumping and sontaring ati caring president.
It is like some suggestions are made just so lungu ,as he would says no and looks good…
ZESCO didn’t start this. This was driven by the top who are driving the “DOMESTIC MOBILISATION” agenda given their failure to raise external funding to pay for the unnecessary loans. If you read the President’s statement correctly, he did not say ZESCO or ERB embarked on an unsanctioned exercise, no. He said that he has decided to temporarily halt the his tariff increase following “consultation” he made with the impact on business and growth being the area requiring further review. GRZ/ECL has no money and few sources, are struggling to meet debt and other obligations so will increase tariff’s to raise funding. Period
Sir you can do well to ensure fair justice.Deal with that issue of the issue of Vespers shimunzila,mapenzi and others.Deal with the issues of ethnic cleansing camouflaged as retirement in national and public interest otherwse these issue are looking like they will define your presidency
BR Mumba is right on Zesco. I guess you are an Electrical Engineer. Others are just shooting in the dark,
@SMK … I went to university to study aeronautical engineering but switched to the School of Business to eventually study accountancy.
Ended up an investment banker and it’s been a wonderful life for me. No regrets so far. Maybe just one … I wanted to be the first Zambian born astronaut in space.
But hey, what the heck … there’s more to do down here on earth. I was the best physics student my school ever produced.
Sancho …
BR soiled BAMBA is talking from his a.ss and does not know the differences electricity and his piss
@Spooked … please refer to 2.5 above
BR BAMBA
I don’t have to refere to manuals , I am a hands on
Before I read the story, someone update me on the caption “Dora energy minister?”
Good decisions for the benefit of the utility and sustainable growth of the power sector in Zambia it could be more for the utility They have real options including new business segments in Electric Vehicles and other growth revenue generating measures
They should streamline projects implementing units and consolidate into 1 Engineering Development Directorate and rationalize to USE the Employees capacities apart from operational and save some overruns on projects Costs on those financing methods for Re-investments taking more of those financing onto their balance sheets as opposed to EPCs contracts sometimes will translate into some much needed working capital
Its good to see Bamukuba…
You can form SPVs and EPVs for new business segments but that should be optimize YOUR WACC and REDUCE YOUR risks not the other way around in those business organisations in operations and projects
Restructure some
BOSS, THEY ARE ALOT OF OUTSTANDING ISSUES.U REALLY WANT TO GO FOR MORE YEARS IN POWER. THIS IS A CAMPAIGNING STRATEGY.BOSS,DON’T BE TOLD LIES ALOT OF PEOPLE HATE YOUR GOVERVANCE
its not a campaign strategy Cost of Power (electricity hydros) and technologies have been reducing global and the Zesco application should be reflective of that reduction Its a good thing Investing in MVAs and Kilometres of Power but Funding methods and EPCs contracts must reserve something and leave atleast a Dollar on Zesco on Materials and Construction because of maturity and risk profiles of these mega projects that have potential to strain and create a working capital and operational challenges and still leave the ultility to operate Its not about increasing the tariffs but reviewing the way we are procuring and reserve something for the ultility in those funding methods and simply not wait…
not wait for years for revenue lines to come through or PAY BACK periods Sometimes the Issues could be cashflow mismatches that the ultility must address and not increaments
The utility wit a least cost strategy must explore and glow its business segments and most importantly its customer base ,diversify its mix It should avoid falling into a death spiral trap its should explore many sources of new revenues present at its disposal some and many of it could be in in broadband ,IT skills,maintenance and operations including projects implementing units and save
The utility has a great skill of knowledge and insights including talent not to fail its about the Zambian mind set
Those also…
EPCs projects must translate in some savings and cash-flows for the utility for eventual reinvestments it should not be that all is paid to EPC contractors because ultimately the utility must maintain and operate the capacities immediately after commercial commissioning before more customers are taken on the grid to service the costs in fixed and variable for making available the capacity that is the main problem we have in front loading power Investments on not so quality customer base or numbers in Zambia apart from traditional PPA ones
The need for the utility to be a low-cost manager of in its portfolio energy assets is a priority The second is to derive synergies from its current scale of business segments to create revenues to absorb and cover its so much talked about G&A without further incurring additional Financing and charges. It should continue focusing on growing its businesses segments from reinvestment and make risk adjusted returns as opposed to non if its will emerge for long-time but at the same time growing its capital sources and plant in the most sustainable manner The utility should also review its term sheets and re look at its capital allocation strategies according to the risk adjusted returns manner to prepay…
certain loans and facilities also that are onerously hindering the potential growth of the utility or restructure for future viability and flexibility of the utility of course with Gov support and Guarantees for those social and economic necessary power projects
Increasing tariffs has limits or ceiling and often should be a last reserve for a world class utility in operations Its an asset that should be leveraged
Napyamo//
How long is the suspension? Are we going to say the same when the suspension is lifted?
We can all jump for joy at such a magnanimous gesture but remember these words – load-shedding is coming! Naturally, Zesco would deny this as how could they discuss a tariff increase and load-shedding in the same breath. Now that the tariff increase is off the table, load-shedding will be front and centre. The tariff increase was the only way for them to protect their revenue in the face of load-shedding where they would be producing less power and therefore selling less power
@B R Mumba, Sr
By growing on the margins, any enterprise can increase its sales thereby growing its revenue.
When you grow or increase margins it means you grow profits, not sales , because you are reducing costs. Confusion in the head Ba so called Accountant .
Ba Alibaba … muleikalafye!!! Nga ta mukwete ifya kusosa mwaikalafye. Ati confusion in the head Ba so called Accountant.
Here’s Cost Accounting 101 … there’s a direct relationship between growing margins and growing sales. They both flow in the same direction.
So, back to the margins, the reason it’s called marginal analysis is because on the margin, you have actually met all your production costs and are profitable.
Everything above that is above is beyond what you need to keep your business afloat with pure profits without expenditure on labor (induced slavery) just materials costs.
In other words you have arbitrarily turned some of your variable costs into fixed costs thereby increasing your margins. But for those products to yield any economic value to the enterprise,…
Continued…
But for those products to yield any economic value to the enterprise, you still have to have a market (sales) for them.
So, that growth to the bottom line comes as those sales increases, growth to profits flow. In other words, growth in profits and growth in sales are not mutually exclusive.
That’s where accounting turns into engineering (financial engineering) because you have to play with the CVS variables. C=Costs, V=Volume and S=Sales.
Any of those three can work for your marginal analysis, you can reduce costs, and increase both volume and sales, your margins would grow.
You can decrease volume and increase sales and reduce costs and your margins would grow or you can increase sales, increase volumes and reduce costs or if your costs increase, you turn…
Continued…
You can decrease volume and increase sales and reduce costs and your margins would grow or you can increase sales, increase volumes and reduce costs or if your costs increase, you turn around and increase volume and sales … so many variations on variables to play with but you always have to think outside the box to increase margins and/or sales at the same time.
Now, that’s too much free information for you. I paid hundreds of thousands of dollars up to grad school and you ain’t getting what I labored for for free without huge consulting fees.
Epo mpelele,
BRM
CVP Its a factor of both Volumes in Mwh or Price Tariff but if you increase Volumes in capacity better than price then you grow your revenues as opposed to price Tariff alone since you may lose others in the long run or long-term to alternative energy generation mix including self generation Capacity can be created not only with fresh capital but optimization of generation and dispatch including energy efficiency and DSM
You are all missing the point lads, its NOT ZESCO that needs the power but the country at large. You remember what we went through in 2015 as a country because of loadshedding? Who in his right mind would want that experience again? Certainly not me and many so called SMEs because they are the hardest hit in such situations. What the public must be debating is, are there better ways to approach the tariff matter to cost reflective? Why cant ZESCO approach this matter in a structured and phased manner? What other ways can ZESCO embark on to be more efficient and effective? Does ZESCO need that staff in areas like HR, Finance, Corporate Services? If these were to be given serious attention and addressed, you will find that ZESCO can become more responsive unlike the status quo.
They have not started operations and Investing in the Power Grid and Generation now or in the year 2019 They have invested in the grid and transformers well and now its time to grow the business The prices in tariffs are reaching the climax and what will be the next You will still also need those skilled and trained manpower for the development and export of capacity and services to global utilities and sectors Optimize them in those business Segments
Its also dangerous to talk about a going concern like that The utility has been investing in capacity and to increase tariffs by 113% will Simpy erode its economy and potential
Perhaps the most important point is to consider How Much will such…
such electricity Price increases Affect Inflation on the Zambian economy The decision to suspend and re model is good because electricity price increase and sudden of that magnitude drive inflation and will certainly ave adverse affects for the local and Zambian economy as a whole
We know the tariff decisions and small small will achieve let tin broader and consider honestly and avoid populalist commentators we saw on national medias supporting the increments without basis and reason leading others into pitfalls deliberately
B R MUMBA, SR where are you posting from?
@ flag B R Mumba, Sr
The problem is that you suffer from a delusion of adequacy. You are all over the place without being specific.
Your initial statement was that, I quote “by growing on the margins, any enterprise can increase its sales thereby growing its revenue.”
My exception to this statement is that sales come first and are external to an organisation. You must grow sales first then margins. You grow margins by cost control which is an internal action. You grow sales by selling more of you current goods or services to a growing fan base or by increasing the selling price of your current products and this is the action ZESCO wanted to take.
Simple and straight forward no gimmicks.