Thursday, May 30, 2024

Team of technocrats constituted to look into ZESCO and CEC impasse

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A Team of technocrats from the Ministries of Finance, Energy, and ZESCO has been constituted to look into the issues surrounding the ZESCO and Copperbelt Energy Corporation (CEC).

Energy Minister, Mathew Nkhuwa has confirmed to ZNBC News that the team has been instituted to look into the matter.

Mr. Nkhuwa said that after the findings, the Government will then inform the public on the matter, and that Government is determined to ensure an amicable solution is reached to the matter.

Last week the Patriotic Front Central Committee had given Energy Minister Mathew Nkhuwa up to end of February to engage ZESCO and Copperbelt Energy Corporation (CEC) on the power supply impasse that has characterized the two entities.

PF Secretary General Davis Mwila said challenges surrounding the two companies need to be resolved before the supply contract comes to an end in March.

Mr. Mwila said that the party’s primary concern was the plight of the more than 300 workers and CEC who may be affected, adding that the party is confident that the matter can be resolved for the benefit of all parties and government.

Towards the end of last year, Copperbelt Energy Corporation (CEC) Chief Executive Officer Owen Silavwe reveale that CEC may be forced out of business as early as March 2020 if a new Bulk Supply Agreement with ZESCO is not signed.

The current Bulk Supply Agreement signed almost 20 years ago between CEC and ZESCO is expiring in March 2020.

But in a recent interview in Kitwe, Mr Silavwe said the delays in finalising agreement with ZESCO is threatening CEC’s existence.

Mr Silavwe explained that failure to renew the agreement with Zesco before March next year would spell doom for the Copperbelt as a whole.

He said CEC currently supplies electricity to all the mining companies with Konkola Copper Mines as its biggest client consuming the largest chunk of power from its network.

“We supply the power to everybody on the Copperbelt so it’s a question of how are we going to ensure that we do this in a way that will not antagonize the sector or the economy, I think that for me is quite critical,” he said.

“And I don’t think we have any challenges in achieving that in a very amicable and efficient way. I think what I would say is there is work that’s going on at the moment and that work is meant to find a solution to this. The Bulk Supply Agreement underpins the supply of power to everybody in the Copperbelt; it’s not just the mines, basically everybody on the Copperbelt. So, my view on it is that whichever way you look at it, a solution has to be found, if renewal is the solution, then so be it. But the critical takeaway is that a solution needs to be found, otherwise come that, day, nobody would want to see challenges on the Copperbelt, and basically challenges to the economy,” Mr. Silavwe said.

He added, “So, we should try, as a country, to avoid dooms day! I don’t think we plan for dooms day. We are working on it, but we don’t have a conclusion today. The fact is process is ongoing, today. It’s not about what I want to see, it what is mutually agreed between the parties at the end of the day, that is important.”

35 COMMENTS

  1. This is what a working pf government does. We liaise with all stakeholders irrespective of tribe religion or political views in order to bring about progress and ensure development. Our aim is to ensure that one day every household in Zambia shall have electricity via a sustainable energy source. Kz

  2. ZESCO themselves don’t want a middleman to distribute the power they generate. Their financial crackheads have obviously advised them it is more viable to cut out CEC. This meeting is a formality, it’s a case of lost opportunity for CEC-should have set up a plant.

    • Sishuwa, if you read between the lines of this article you will deduce that Mr. Silavwe is lying and playing to the gallery. There is something CEC has done wrong and now seeking the help of the gallery to rise and say all sorts of things against ZESCO and GRZ. Indeed we individual consumers we pay for power through a ZESCO. How come? He is seeking our sympathy for something wrong he has done. Why does he emphasize Doom’s day?

  3. What was baffling was that the directive initially came from PF SG to Energy Minister. Does the ruling party SG with no government position have the right to give a directive to a government official? What Minister Nkhuwa has done is the way to go.CEC must equally be strategic and invest in energy generation than just being a middleman.

  4. Sishuwa, if you read between the lines of this article you will deduce that Mr. Silavwe is lying and playing to the gallery. There is something CEC has done wrong and now seeking the help of the gallery to rise and say all sorts of things against ZESCO and GRZ. Indeed we individual consumers we pay for power through a ZESCO. How come? He is seeking our sympathy for something wrong he has done. Why does he emphasize Doom’s day?

  5. If you read between the lines of this article you will deduce that Mr. Silavwe is lying and playing to the gallery. There is something CEC has done wrong and now seeking the help of the gallery to rise and say all sorts of things against ZESCO and GRZ. Indeed we individual consumers we pay for power through a ZESCO. How come? He is seeking our sympathy for something wrong he has done. Why does he emphasize Doom’s day?

  6. Lets get to the bottom of the issue here. In the past few years ZESCO has had very difficult times to mainly due to poor long term planning. In the first place why did ZESCO engage a middle man to sell its commodity when it has the capacity to do so? The consequences of this has been erratic cash flows because ZESCO can’t face the end users of its product directly because of the man in the middle, CEC. Whilst the country is struggling with loadshedding especially residential and commercial customers, the mines have it 24/7 yet ZESCO is getting NOTHING in terms of revenue. Is this normal honestly? This issue of fearing job losses whenever important decisions are to be made must come to an end. Its clear and plain simple that ZESCO is struggling because the contracts between the so called…

  7. …contd
    In short, Government must quickly move in and overhaul And restructure ZESCO because by letting the status quo, it will be problem after problem. South Africa dont hesitate to make changes at ESKOM when the utility if not performing whats so special about ZESCO? CEC is NOT necessary in this matter and if we have learnt any lessons from the effects of loadshedding, then its time to be firm, decisive and let ZESCO begin to drive the economy. But it needs brains there not bodies as things stand.

  8. The decision to make Zesco the regional power hub and control Area is positive and correct in the right directions Zesco can supply Directly to the mines and the costs in those power security supplies and contracts could lower the cost of Business and power bills for the residents of the mines and mine owners and reflect in the greate wellbeing of the people

    Zesco has Invested and is investing in Generation capacity and Transmission lines to the mines to adequately supply the mines and meet its challenges now and in the the long-term The marginal increase in directly supplying the mines power (bulk) will help to perform Zesco’s revenues(per Kwh cents of marginal contribution)…

  9. and make it easier to help it Financially restructure its balance Sheet from its national Invested to the long-term benefit of the country’s Energy sector and avoid it to fail because the marginal increase in tariffs from tariffs decisions by ERB will have almost reached its tipping point and because its Invested in capacity it must be allowed to recoup its Investments and perform its Financial contractual obligations and reinvest into other renewable sources country wide as per ministry of Energy Energy resource plans integrated but also allow others in completion and healthy with it as a generator transmitter and supplier into or in parallel to its regional owned grid

    The point the…

  10. technocrats should address how to Transition from those to Zesco powered supply to the mines deal with the indirect and direct associated costs of 400 employees and assure them of social security and continued employment as part of the new Zesco TT company to the mines Deal with how to address those stranded infrastructure and find a ware of either procuring them or leasing them

    The decision to assimilate is better than separate isolated TSOs and losing the vertical integrated utility and avoid thinking that “synergies could be realised in unbundled utility setups”

    So assure security of supply and social and supply directly to the mines because its in the best interest and the…

  11. the additional revenues will certainly make it flexible for Zesco to reinvest in its Capacities and regional and interconnected TT to Perform the Energy Sector long-term to the benefit
    The marginal increase in revenues (forex) will make Zesco perform on its OPEX and CAPEX and help in turn to supply the mines including society on the copper belt

    The committee should also consider the Operational control and who is in charge on control areas and define the contracts and responsibilities but above all ensure social security and continuity of employment and performance of all units under Zesco and TT is more than capable to operate and supply the mines now and in the future…

  12. People please don’t comment anyhow. Do your research on the construction of Kariba dam, CAPCO, CPC, POWER DIVISION OF ZCCM and finally CEC. CAPCO, CPC and Kariba were solely created for provision of power to the CB mines. The supply of bulk power to the mines is not a Micky mouse undertaking. It is a highly technical and calls for operational excellence. Supply of power to the mines was set up as such from the yesteryears of AngloAmerica in colonial Northern Rhodesia. Zesco is already too burdened and should not be burdened further with wheeling electricity to mines. We have a crippling power deficit at the moment. Cripple CEC and you cripple the the Copperbelt because the infrastructure and engineers that supply power to CB mines is owned and operated by CEC. Let us ADDRESS THE POWER…

  13. ACTUALLY CEC was a government quasi company before the MMD disastrous privitisation under ZCCM
    and should revert back to its old status quo. Let CEC become a subsidiary of ZESCO. full stop and no one will lose job

    Zesco should just buy off the shares in CEC

  14. ACTUALLY CEC was a government quasi company before the MMD disastrous privitisation under ZCCM
    and should revert back to its old status quo. Let CEC become a subsidiary of ZESCO. full stop and no one will lose job

    Zesco should just buy off the shares in CEC

  15. Let us ADRESS THE POWER DEFICIT NOT WHO WHEELS THE INSUFFICIENT POWER? EVEN IF ZESCO WHEELS THE POWER THE DEFICIT WILL STILL BE THERE. CURE THE DISEASE NOT THE SYMPTOMS. ZESCO SHOULD FOCUS ON POWER GENERATION NOT WHEELING OF ELECTRICITY WHICH IS NOT EVEN SUFFICIENT. Commadist economy controls will just make things worse. We saw this under KK’s UNIP. Who wants to go back to those days of perpetual shortages?

  16. My advise to the team of technocrats is that they should revert CEC to its old status as a Government quasi company
    We all know know that it was part of ZCCM and sold for a song during the disastrous privitisaton by MMD.

    Let ZESCO buy off 51% shares and make it a subsidiary and no one will lose a job.

    Aluta continiou

  17. Did you read about the reduced profits or losses which ZCCM-IH made in 2019. Read the article it’s on LT. Why compound stressed Zesco with stressed ZCCM-IH? Do you understand investment ( I mean long term investment not investment in a grocery shop), operations management?

  18. The point is the eventual proceeds for the offtake contracts embedded in those power generation capacity projects and most of them have been funded by rate payers or Customers Taking a position in CEC by Zesco does not meet also mean hostile takeover The ideal position is that company with its directors and employees 4oo becoming a Zesco Transmission or Transmission systems operated company The engineering benefits and operational effectiveness and savings are much more than the current corporate mistrusts between the 2 and the better Invested in capacity and infrastructure is Zesco and it has a long-term view and horizon Its been Investing consistently

  19. You have no energy security and capacity with conjestions and heavy costs on these lines and networks in the region and With a move towards towards power trading and auctioning , Zesco is a better positioned company now than before to balance and control the regional system CEC should show security of supply and installed capacity Contracts of differences now in these energy marets have become tricky and the one with installed in trading markets sells those CAP in power trading are eventful Its power trading now and who ever has capacity will wheel and sell That is the point okay

  20. @Napthali sorry I cannot converse with you because you don’t seem to understand what you are blogging about. My wise counsel is that a little knowledge is more dangerous than ignorance. One thing before I sign off. You seem to be so antagonistic/hostile against an ideginuous Zambian owned CEC. You don’t care about the baba zonke shoprite, picknpay, FQM, Zambezi sun hotels, Lebanese speed cameras etc. You choose single out an indigenous Zambian owned company to be dismembered and with it the CB underground mines. Are you really a Zambian? If so, what self-hate do you have that you choose to dismember your own kith and kin and leave the baba zone foreigners to go away with the little forex Zambia scrapes! God stopped making new lands/countries in Genesis. This is the one & only Zambia…

  21. The PF SG should know his limits of what to talk about.The nation has lost millions of dollars through this bulk agreement MMD signed with CEC. Why is he putting pressure on Zesco? The deal is coming to an end and what any serious leader should be saying is that CEC should buy electricity at economical rates.Whether they make profit or not its a business decision they have to make. The 300 employees can be absorbed in Zesco if Zesco took over. Lastly when Privatisation was taking place CEC was supposed to be handed over to Zesco but possibly greedy people created the CEC management buy out that has just enriched few Zambians. Also its a total and shameless lie that CEC supplies electricity to the entire copperbelt.

  22. We cannot go to the days of Thomas Watson or Edison and talk about Generation and Transmission business and its structural fit into the current unfolding Zambia Energy power marketing structure.CEC should have invested at the time when they were making super normal profits much better than Zesco in capacity than trade capacity wit Zesco and fail to address the risks in its Transmission Business infact it has quality revenues and attractive business segments to auction and invest into a similar 750 mega watts of power plant or other renewables to bit Zesco whose funding was from rate payers and PPAs mostly non competitive The base on Bulk supply agreements and simply soup the TT has…

  23. The base on Bulk supply agreements and simply soup the TT has been inherently wrong and risk but there is still time to show seriousness and invest in generation facilities like and evacuate that power to economical sites and help mitigate the countries energy crisis As for now it should not be an aggregation of generation and transmission costs to the mines plus wheeling and others when Zesco can do it as CEC (Zesco Transmission North ) because it has both installed capacity and overtime has built the expertise

    The strategy worked then but its time we reinvested also into generation facilities of such mega and significantly show commitment and played a huge role in Zambian energy sector in…

  24. in complementally to Zesco As it is all those 400 employees and facilities can infact be better and their security and tenure secured better if commuted to Zesco including Power Zesco that the short-term nature of those strategies we have now come to observe recently Zesco as a Transmission Company shall always be there even when mines and ownership interests have changed and others to the benefit of Zambians That is why it makes sense to have it supply now the mines and manage the countries energy regional control system and act as a balancing authority

    But the owner who has created value this far must be compensated and the acquired assets and company vested in the interest of…

  25. Yaa yaaa Okay this is a blog not one to one Okay now to put you clearly in shape and understand why , Discussions and Planning for Power Grids must be thought very broadly and carefully at 2 levels without being political or enae in corportate Politics.If you approach it that way then you begin to see longterm and avoid the pitfalls of he past and focus for the future You need to see why the Zesco case is important and that is why i am trying to explain in simple blogging without being technically sharp I am simpply tryin to hint to you and see a broader and review your comments and structurally fit them now in our current Grid.I personally support the Investments of CEC and Management…

  26. efforts but to be honnest the issue here is of national charecter and interest .It should be seen at 2 levels in our national electricity Grid That is 1 at Transmission when supplyig Bulk to Customers and 2 at Distributions to medium voltage Customers and others in disribution segments Currently its only Zesco that meets those 2 requirements as per this our discusions and CEC currently is in a weak position which every one including the CEO who honnestly made that comment hoping to find a workable solutions near Future to see how it will mitiate and participate in the Zambian energy sector.Now when you look at the needs of a ultility to engae in bulk supply ,Bulk supply will normall entail having a…

  27. Regional or Trans regional operation and control systems facilities reselient enough for the necessary operationalisatinon of those inter connected power eneration and transmission networks with capabilities to service the distribution networks.It ust not just be on paper or contracts the ultility playing reional contro or balancing must have capacity and reserves in security of supply to meet its customers ever increasing need of power and still do so for longterm

    That power systems design in that ultility must be advanced to meet ever changing needs of the Grid,the Changing power needs of the customers and be flexible enough for deployments of DERs and others to contribute in demand side of the customers…

  28. for longterm even in climate conditions Without that then you will observe and agree with me that currently in our electricity Grid and Power systems its only Zesco that is positioned better to work the grid on all requirements from Generation to trasmission and distribution including controls and balancing as an operator and planner to supply the mines and other ditribution clients

    Supplying power in bulk to any customer be it mines and others must be thought to be in an intergrated manner or appraoch by the “Regional Power Systems Operator to meeting those cliets energy demand at peak and other times of constituences This requires the modelling of the Supply side which is the Generation facilities and…

  29. and the demand side which is the customers (demand)

    This is not a shorterm outlook in those resources It requires an intergrated longterm appraoch (IRP) at all levels of supply that is both levels of the Zambia Power Grid(Transmission and Distribution) Its beyond the 2 Corporate poitics also but should be a focus of Longterm load forecasts modelling Creation of those reserves margins for the security of supply,removing agregation costs,capacity committment fees as you move towards flexibility and also technologcal policy transition of those Gerenarion and Transmissions Developments including issues of Grid modernisations and penetration of other options and forms of Energy Sources

    So i hope i have put you…

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