FORMER Zesco Limited managing director Robinson Mwansa has advised the power utility to come up with a business proposal to enable the company access loans from commercial banks to recapitalise it.
In a written submission to the Energy Regulation Board (ERB) on the proposed 66 per cent electricity tariff increase by Zesco, Mr Mwansa said that the utility firm needed capital, which could only be accessed from commercial banks.
Mr Mwansa said there was no argument that the power utility was in dire need of capital injection.
He said that Zesco should not increase its capital base by subjecting citizens to the proposed tariff increase, as the cost of living in the nation was already high.
“With the difficulties all Zambians and organisations, including Zesco are facing, this is not the time to incite the citizenry to disturb peace and rise against their own Government,” he said.
He said Zesco had a large old stock of customer debt amounting to about K500 billion, which could be sold at a discount of 80 per cent.
Mr Mwansa said that this would mean that the customers paid 20 per cent while the remainder was written off.
He said by doing that, he was optimistic that within six months, Zesco would be able to raise K100 billion.[quote]
With the customers taking advantage of the debt write- off, an additional K100 billion could be raised and used to pay back commercial banks loans.
Mr Mwansa, a chartered electrical engineer, said it was common practice in business to reduce prices on old stocks to unblock the money which was locked up and raise funds.
“It is in the best interest of Zambian commercial banks because they know it and I know it that if Zesco sinks, the mines will sink, the Zambian economy will sink and inevitably we shall all sink together.
He said Zambian power consumers were dissatisfied with the performance of the national power utility.
Zesco could use the bailout capital accessed from banks to improve service to acceptable levels within nine months.
He said even if the ERB granted Zesco the requested increase, the cash flow would not increase much for the first nine months due to consumer blacklash.
Mr Mwansa said the value of any commodity went down when the price increased if there was no proportionate increase in the quality of the commodity.
“I am making submissions to ERB to reject the Zesco application and defer it to March 2010 to give Zesco chance to raise money from its resources and improve the service levels,” Mr Mwansa said.
He said that the proposed tariff increase would to some extent lead to citizens not be able to use power thereby dropping the standards of their lives or businesses.
“Those who are making this application may not have done any social, economic and political strategic environmental scanning and analysis on the impact of the increase.
“On the other hand, they did and are ignoring the results of the due diligence study,” he said.
Mr Mwansa said that in the medium term, Zesco could stop the wastage of the little money that it had if its workers rededicated themselves to improving the power supply using the available resources and raising the service levels to acceptable standards.
[Times of Zambia]
you could be right mr. mwansa
Good analysis indeed. However I thought that Mr R. Mwansa was a Physicist, but now I get “Mr Mwansa, a chartered electrical engineer, said it was common practice in business to reduce prices on old stocks to unblock the money which was locked up and raise funds” alone.
Does this imply that I have always been wrong after I got wind of the news that the brother studied Physics?
__
Sokwe Kaamuleya Katabi.
That’s what a normal human being should think….
‘…wonder why he never sourced these loans when he was MD for ZESCO!’ something fishy?!!!
Give some thought to what the man is saying. He worked for that organization therefore has better understanding of what can be done to make ZESCO operate economically and efficiently. In this case all those that are alive and are Electrical Engineers or otherwise electrical professionals, must hold a meeting at which they must come up with workable proposals for ZESCO to look at and implement if necessary.
Zesco was lekka under this guy. remember bill buster promo
Imwe guys, this man is only saying this because he has started paying bills now. I agree with everything he has said but do you think he would have said this when he was in charge? Even clerks at ZESCO were not paying for electricity the last time I checked.
Thats word there from an Engineer,If only Engineers had a chance to rule Zambia,they will indeed make zambia are better place.This is because Engineers are trained to analyse critically, to be honest and to uphold integrity ,as they design economical and safe facilities.But anyway they cant be politicians cause they are scientists and usually spend all there time thinking.
Mr Mwansa thanks for advicing these retards that they can not raise capital by sqeezing the poor,let them plan and strategize for other possible ways.Its a lame country,lame leadership consequently everything is lame.
Well said Mwansa though. I bet this will only fall on deaf ears.
Mwansa, thats brilliant Mwana. Tell these bootlikers. That is absolute sensible and accurate. Even the money they researved for the mobile hospital can be used here! This is not rocket science.
I support Mr. mwansa’s proposal. Let’s spare the Zambian people from unnecessary suffering caused by high cost of living. Lets not sacrifice the people to save ZESCO.
Energy is the base of any economy: increase the cost of energy and cost of production goes up. Perhaps 66% increase is too high, why not come down to 20% increase and we combine this with Mr. Mwansa’s idea?
These chapts know nothing about capital projects and they are seated waiting for Zesco to sink. If the simple problems Zesco has can not be solved now, that economy is going to tunk big time while RB is watching. This is not a joke. Look, I have never seen a country with hospital wards closed, only in war torn countries. What is the problem with these people Kanshi. Even basic knowldeg is lacking on the part of GRZ wow!!
Musilikali,
It’s a pity you didn’t have power in your hut when mr mwansa was ZESCO MD.we had load shedding especially at the height of the drought but it was not like what it is today.so the man knows what he is talking about.
Ba ZESCO naimwe, how did you come up with 66% all of a sudden? Were you sleeping all this while. I mean, I find it absurd for ZESCO bosses to jump to 66% when ZESCO financial problems have been cripping in, gradually. The tarriff increases should also be gradual, as it has been in the past. What has changed all of a sudden. Common Zambians 66% is too high. Mr. Mwansa’s remarks are very true indeed.
Yaba
(1) Zesco is over staffed get rid of some people who are doing nothing but waiting for pay day and save some money (2) Zesco employee should start paying for electricity there is nothing for free now days. (3) government official shoult start paying electricity using their untaxed huge salaries inlcuding Bwezani.
#8 Ghost dog
BUIDING 7 was the third skyscraper to be reduced to rubble on September 11, 2001. According to the US government fires primarily, leveled this building, but fires have never before or since destroyed a steel skyscraper.
Can you please shade some linght on this one, since you a thinker?Thank you.
why
It is believed that Shisala was droped as MD Zesco for refusing to hike rates? If that is the case, then Well done Shisala. Now, Mwansa desearves a big hand for the insight. RB should read such sensible comments from MD and sack all the bootlikers who are confusing. I am sure they advised him first to increase the tarifs, second to buy Manda Manda and Mobile things oh Hospitals. The are going to advise him to Sale Zamtel and eventually prote Dora to vice presidency. Then he will think of going back to the farm after all this mess!!!
oops, I meant to promote Dora!!
Wonderfull piece, Mwansa, though i feel that that one intervention may be inadequate, he also has to look at how to invite private capital to invest and that is were the tarrifs come in to make such an investment attractive. The other problem is how collectable is the K500 billion, a large prportion may be owed by the Goverment and other amounts by firme/individuals who could untracable> The fiathfull one no 17 actually ZESCO has been applying for tarrif increses but the ERB has been rejecting or slicing the proposed increments.
#30. There was limited loadshedding during Mwansa’s reign at ZESCO because there was no power station rehabilition then and secondly the demand for power was low as most mines had not increased their production capacity. I am afraid it had nothing to do with Mwansa’s management skills. If this guy were a good manager as you would like us to believe, he would have set the rehabilitation process in motion much earlier. And certainly ZESCO would have been in a far much better situation than it is now.
#8 Ghost Dog, I like your honest ignorance. Well, are you refering to those engineers who almost chewed 900 mwakuti bilio in Eastern Province or those incompitent ones running ZESCO who even forget that Kafue weed can plunge the nation in total darkness, or the consultants supervising shoddy works in contrsuction, or those who can’t add value to Zed’s raw materials? In other words, professional area is no measure of competence, but is a useful ingredient in leadership as it helps one to have ehnanced level to understand situations & analyse intelligently – as seen with Mr Mwansa. Having said that, what Mr Mwansa has just said is indicative of an innovative acumen which has been supressed in many peoples’ heads. Why? We are all thinking it has to take the President to do all things.
Thumbs up Mr Mwansa. Zesco should realise by now that if people are still owing them, how in the World are they going to collect their debt on top of a tarrif hike? Its easy for us here to say Mr Mwansa should have done or said this while he was at Zesco. Ever heard of the exression ‘we learn from mistakes’? Zesco should give this a serious thought.
#8 Ghost Dog, to show you what engineers should have been doing “SOUTH African Energy Company (Eskom) has indicated willingness to set up a 400 mega watt electricity generating plant in Maamba to utilise the low grade coal which is ideal for the venture” Times of Zambia. So much for zambian engineers.
#17 9/11 is conspiracy,those demolition theories are not true,and even plane impacts can not cause such extent of damages to structures,such type of collapse can only be atttributed to explosives that could have been planted in the buildings. For the building to collapse in that fashion, all of the load bearing supports would have had to fail at exactly the same time.
The claim that the collapse was the result of a fire requires the fire be equally distributed throughout the entire floor of the building, providing equal heat for an equal amount of time, so that all the load bearings members would fail at the exact same moment.
#23 Kamunyama, sorry
Wise words and suggestions. Electricity supply is an area that can be challenging but worth resolving within Zambia. Over time things will get better using intelligent planning and management. We do not have to submit to selling our electricity and water resources to other countries. It is encouraging to have people like Mr Mwansa with good solutions……Thumbs up:)
Why can’t RB reappoint Mwansa to help Zesco revamp it self as one of the best previously Known. Mwansa knows how to run ZESCO it was a shame that Levy forced him out to put his relative Sasasali.
you know ignorance is amazing. anyone tells you crap and you clap because it pleases you . shame you cannot even remind the man that the bulk of those zesco debts developed under his watch. just a glimpse of the skeleton.
comments?
GIVE MR MWANSA THE JOB OF ZESCO MD.HE PERFORMED WELL DURING HIS TIME.