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Monday, May 23, 2022

ZESCO Unbundling proposal gets support from Chishala Kateka, but opposition persist

Headlines ZESCO Unbundling proposal gets support from Chishala Kateka, but opposition persist

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.

Chama North Member of Parliament and  Former General Secretary of the National Energy Sector and Allied Workers Union (NESAWU) Yotam Mtayachalo
Chama North Member of Parliament and Former General Secretary of the National Energy Sector and Allied Workers Union (NESAWU) Yotam Mtayachalo

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.

24 COMMENTS

  1. Which opposition?
    Its only the PF who want ZESCO to remain as it is . They want to continue milking it.
    ZESCO is highly inefficient and poorly managed.
    JUST UNBUNDLE THE DAMN THING.

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  2. As zambians, on either side of the isle, let’s ask ourselves what the objective of the unbundling is and what exactly is involved?
    If the intention is noble, the govt should not rush the process as MMD did during privatisation, but let all stakeholders be involved, and all views considered.
    Having said that, I suspect that this must be one of the conditionalities imposed by IMF for Zambia to access their loans.
    That’s why it’s important for us citizens to know what our govt has agreed to do in return for accessing IMF loans.
    I fear that it is privatisation season two.

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  3. Get ready for more expensive electricity. Separate boards and CEOs at generation, transmission and distribution levels. These will require a mark-up to enable them to cover their costs. Is Chishala Kateka ready for this?

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  4. Understanding the development of the Zambian Power market structure and needed workable energy policies will be helpful to see the cost and benefit of having individual separate units as opposed to a workable separate unit you Begin from understanding how PPA and offtake agreements are structured and therefore Financing of Power projects and reasons dispite potential very little investments have accrued even when tariffs have been adjusted The financing Power ultility projects and infrustructure from Generation sites to Distribution and Customer service in development requires this structure The investments across these units work and complement each other in cost sharing and public good makes it possible for the model to work as the sector and ultility develos towards a power market…

  5. Zesco without unbundling has no future. But political wrangling will prove to take years. Want reliable and cheap power? Forget Zesco, get SOLAR!

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  6. Listen fellas, before some of you were born municipalities used to distribute services like retail electricity and water. ZESCO was too big to interact with customers at household level. What we are basically saying is let responsibility now rest squarely with town and city managements. They will know best how take care of their people and jurisdictions. Siyani vintu vinkaleko bwino! Atase!

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  7. We zambians have lived on a false economy for many years GET REAL AND FACE THE REAL WORLD
    OF COURSE ZESCO HAS TO INCREASE TARRIFFS TO SURVIVE

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  8. She is also in bed with the imperialists like hh. My heart breaks knowing hh is back to finish off what he started during privatisation

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  9. Another opposition leader probably looking for a job in the new dawn govt.
    If you say that the unbundling of ZESCO is not the solution to solve the operational problems the utility company has had over the years, why then do you support the idea? We know that as opposition you need to be heard sometimes but be objective and relevant. Up until now I thought this lady can offer us an opportunity to look for a woman president after mama Nawakwi seemingly losing her political breathe.
    You can easily see that this idea of unbundling of ZESCO is an IMF conditionality. Not until this govt reveals what is in the IMF package and what their concessions are, we will continue speculating.
    Again, I appeal to the new dawn govt to re-visit their engagement with the IMF. The 2.8m Zambians voted out…

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  10. Party president Chishala Kateka, listing the known problems about Zesco will not stop selling Zesco to foreigners and enrich greedy local businessmen. We, Zambians can easily run over such listed problems in no time and quickly advance to a level of putting a man on the moon. Depoliticizing Zesco and other Government assets, as of now, require Hh and other businessmen in the Government to declare their businesses, put.ACC and other watchdogs under the parliament less cabinet ministers( oversight). Their, watchdogs, main task should be to check current economic crimes or plunderers. We can have a task force to look into the past separately.

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  11. Unbundling Zesco is secondary. The primary issue is to check mismanagement. Government is required to have not less than 50 percent in each unit.

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  12. Hands up all those who want their taxes to continue going to pay ZESCO staff salaries and manager pecks while it continues to make losses, fail to supply electricity without load shedding and waste electricity because it is cheap?
    Hands up all those who want ZESCO to make good profits and pay tax to the treasury so that the government has more money to help the vulnerable?

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  13. Yes Zesco has long been treated as political entity just like the interference tat killed Zambia Airways. PF did the worst in their larger mismanagement game that brought down the economy.

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  14. Even ichi troll KZ needs unbundling from his toxic hatred of HH . Look what your PF did to derail Zambia Railways restructuring and its MD Clive Chirwa.

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  15. Before embarking on these not so cheap commissions, go for the low hanging fruits on why almost all Parastatals are not operating as businesses; political interference, nepotism, very poor working culture, exaggerated conditions of service (even if the company is clearly on its knees and bleeding), misuse of company resources etc

  16. I know from the point of an angel investor who has seen potential in clean energy and renewables at the current LCOE electricity by Zesco and using current technologies,they will still find it profitable to Invest and still make a return for long-term to come To grow the sectors in the energy they will require to Invest. In own Generation facilities Transmit on local network control ultility with capacity Zesco With Transformation the ultility is able to grow it’s services and contribute positively If you unbundle most rural and urban areas will remain grid inslands places in chupa chama chief shikufeles namwalas palaces means chingwala sianjalika kaumbwe lumezi kaole chembe chief monze hakamangwe musungwa serenje mkushi chiyawa chongwe chitimukulu mabumba mukanta ubwile etc We are…

  17. The [email protected]
    Most strategic industries, even in developed economies, do not exist to make profit per say, but to enable development of the economy.
    Imagine Zesco in private hands. You would never have electricity in shangombo, kaputa, vubwi,etc, because these investments would be deemed uneconomical.But development will not come without investment in energy.
    So let’s take a step back and think critically about what we want to do.
    This IMF issue will leave us in a worse state than we are in right now.

  18. Privertization reloaded. Only one man will come out rich and the rest will die. We signed a contract with the Devil.

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  19. Management and Mismanagement at Zesco by politicians is the biggest reason why doesn’t make profits.
    It’s well known that politicians simply take their girl friends and dump them at Zesco and positions are created for them.
    unbundling of Zesco should be the last option.
    Zambia is under siege from Western capitalist who want to take over Zesco.

  20. It has also reached the tariff cap to increase further is also risky on its revenues reading the cost of service study by ERB gives you better options to restructure and transform the ultility in its better current form other than the bad proposal to unbundle it The structure and developments of the current power market systems in Zesco being a regional control area must continue and be supported Other IPPs must be allowed to operate in the market in auctioning basis at best price global reducing energy prices per kilowatt The current electrification road map in REA and Energy OPPI must be supported only with funding methods to grow the installed The IPPS also must be a source of…

  21. Unbundling! Apart from one contributor, people forget that the power sector in Zambia started off “unbundled”. It was KK who misguidedly decided to consolidate the power sector at about the same time that he consolidated the mines into one big mess called ZCCM. For generation, there was ZESCO and KNBC (Kariba North Bank Company). For transmission there was CAPCO (Central African Power Corporation) and finally the municipalities were in charge of distribution. In fact I was told by some old council retiree that electricity was once the councils biggest cash cow to the extent that city and municipal roads were so well maintained that the word pothole hardly existed in the local lexicon. ZESCO like ZCCM before it was and has been a political animal and as long as it remains a government…

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  22. of concern in how they passion their costs in those PPAs for power to be made available into the national grid

    It’s also a source of concern to advance certain energy policies without being in mind EQUITY and need for further well thought out policy positions Investments in the energy like those by Blackstone in equity with others can happen in our sector above the notional amounts Zesco owes on its balance sheet with right Investors The reported $3Billion by Blackstone is still available with right startergies and approach to reinvest in Zesco and other IPP apart from coal

  23. @The Analyst… I really really despise lies spewed and misleading statement from people like you that try to look smart without a real understanding of the challenge (background) of the limited and small power generation capacity in 1964 as well as the non existent grid that was only limited to transmission of power from new Kariba dam to the mines on the copperbelt PERIOD. The was no grid to any of the provinces!! Mongu, Solwezi, Mansa, Kasama, Chipata all run on Diesel generators!!! Kaunda had to build an entire grid to the provinces across the entire country from scratch and it was not a small feat in addition to building new power plants Kafue and itezi tezi in addition to doubling power generation capacity of Kariba as the british had only intalled 2 turbines at independence. All…

  24. This is a blanket statement.Which countries? Our firm is on its knees.It owes independent power suppliers millions,owes billion of dollars.The situation as it is is a waiting time bomb for ZESCO.

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