The opposition new Heritage Party has said that the move by the new dawn government to restructure ZESCO by unbundling the institution is a welcome step in the right direction.
Party president Chishala Kateka said that the restructuring of the institution is long overdue as ZESCO has for a long time been faced with political interference and used to fund political activities, adding that the institution is faced with serious financial woes and inefficiencies and though these issues may be, it is recognized that these can be addressed without the need for restructuring.
Ms. Kateka, however, stated that the more serious issue is the fact that ZESCO has proved to be a bottleneck to the growth of the energy sector in Zambia as the company has been the recipient of all off-take agreements from private sector power generating companies and this has proved detrimental to the sector as the company has not been able to manage these well.
Ms. Kateka said that the result has been an increase in debt as power suppliers have been erratically paid while those companies are now faced with inadequate working capital and that ZESCO’s financial situation has also meant that it has not been able to adequately meet required expansion, resulting in inadequate power for the nation as well as the regional market.
Ms. Kateka is of the view that by restructuring ZESCO, the institution will be enabled to become efficient and profitable as it focuses on its core business while the hived off activities of transmission and distribution can be used to drive private sector investment into the energy sector and this will also enable competition to thrive.
However, Chama north member of parliament, who was also the general secretary of the National Energy Sector and Allied Workers Union (NESAWU) Yotam Mtayachalo has said that unbundling ZESCO is not the solution to the challenges the power utility is facing but depoliticizing the company.
Mr. Mtayachalo said that depoliticizing ZESCO. will ensure that the company runs purely as a business entity and the best human capital are appointed to management positions.
Mr. Mtayachalo stated that while plans to restructure Zesco by the industrial development corporation (IDC) which may eventually lead to the unbundling of the power utility looks good at face value, there is a need to be extra cautious as the process should not be rushed but should be a product of consensus-building among key stakeholders to avoid repeating the mistakes of privatization.
Mr. Mtayachalo said that while the unbundling of ZESCO may lead to improved efficiency and revenue collections, however, the same will come at a great cost to a Zambian consumer as the cost of electricity shall go up because of the anticipated increase in overhead costs and stressed the need to put heads together as to whether Zesco is ready for unbundling taking into account the experiences in Uganda, Nigeria, Ivory Coast, and Zimbabwe.
Mr. Mtayachalo also attributed the inefficiencies at ZESCO to appointments that are largely driven by political, tribal, and regional considerations which he said is retrogressive.