ZESCO is owed K202 billion in unpaid electricity bills by various government departments and quasi-government institutions, the latest Auditor General’s report on parastatal bodies has revealed.

The 2009 report states that failure by management to ensure that it recovered money owed to the company timely resulted in heavy reliance on short-term loans and bank overdrafts.

“As of August 2010, Zesco Limited was owed amounts totalling K202,282,733, 285 in unpaid electricity bills by government departments and various quasi-government institutions,” the report reads in part.

According to the report, Zesco recorded profits during the period under review, but most of its money was locked up in trade and other receivables.

On receivables, the amounts increased to K780,403,000 in 2010 from K768,249,000 in 2007.

“Included in the trade receivables for 2010 is an amount of K301.9 billion, representing 39% of the total receivables which had been outstanding for over 125 days,” the report states.

And the report states that on December 17, 2009, Zesco and Zamtel signed an Indefeasible Right of Use (IRU) agreement that transferred control of all the fibre business and infrastructure to Zamtel.

The IRU agreement provides that Zesco and Zamtel revenue sharing ratio shall be 20% to 80% respectively.

“The agreement also committed Zesco to expanding the network and thereafter transferring the network to Zamtel,” the report says.

In this regard, on July 30, 2010, the power utility company contracted ZTE Corporation of China to extend the current fibre length by 3, 000 kilometres at a contract price of US$43, 900,000.

However, there were no revenue projections on which the revenue sharing ratio was to be based, thereby making it difficult to ascertain how much Zesco was going to realise to enable it service its loans obtained for the first and second phase of the project.

In response to the audit queries, Zesco management stated that the company would engage stakeholders on the possibility to re-negotiate the IRU with Zamtel considering that the telecommunication company’s assets are now in the hands of new owners (Lap Green).
[Zambia Daily Mail]

NCC has also projected a 15% growth in the construction industry this year compared to the 13% recorded last year.

The growth in the construction industry has been attributed to increased infrastructure development across the country.

NCC executive director Sylvester Mashamba said it is against the law to engage unregistered contractors because they are likely to do shoddy works.

“We had cases at the newly-built Levy Business Park where the main contractor Group five/ZCON was registered with us but had 26 subcontractors who were not registered.

We had to penalise the contractor for using unregistered contractors and the subcontractors for working without valid registration requirements and Group Five/ZCON has so far paid about K500 million,” he said.

Dr Mashamba has since called on contractors to ensure that they register with the council and engage contractors who are registered to avoid being penalised.

He said this at a press briefing in Lusaka yesterday.

Dr Mashamba said various construction projects in the road, health, education, energy, agriculture and tourism sectors have contributed to the expected growth in the construction industry.

He said the industry is expected to post further growth following Government’s commitment towards infrastructure development.

“This trend will continue going by Government’s commitment towards infrastructure development as seen from the 2012 national budget where over K4 trillion has been set aside for roadworks alone as compared to the K3trillion in the 2011 budget,” he said.

He,however, said despite the industry recording an average growth of about 17% in the last 10 years, there is need to ensure that this growth translates to reduced poverty levels.
[Zambia Daily Mail]

Bank of Zambia has said that it was unaware of any retirement benefits due to the former Minister of Finance and National Planning, Situmbeko Musokotwane. This is according to BoZ head of public relations Kanguya Mayondi.

This follows allegations by President Sata recently that Dr Musokotwane was receiving two salaries after he left the bank to become secretary to the treasury and later economic advisor at State House.

Dr Musokotwane said when he was hired as a consultant by the bank to provide certain services, he did not get any remuneration from Government as an economic advisor at State House.

He challenged Government to countercheck the payrolls at the bank and Government to verify if at one point he got double salaries.

It was alleged that Dr Musokotwane stands to pocket up to several billions in retirement packages from the government through the Bank of Zambia (BoZ) where he once served as a deputy governor.

But the bank, in a response to a press query, yesterday stated that it does not owe Dr Musokotwane any benefits.

“The Bank of Zambia wishes to state that it is not aware of any payments which are due to the former Minister of Finance and National Planning, Dr Situmbeko Musokotwane.

“The Bank of Zambia further wishes to urge you to contact Dr Musokotwane directly for any further information,” Mr Mayondi said.

A group of sugar cane cutters from the Western Province are protesting at the Ministry of Labour in Lusaka over none payment of benefits by their former employer, CFO.

The group has so far spent four days at the new government complex in an effort to have audience with the Ministry of Labour permanent secretary over their plight.

One of the affected workers, Chipango Masambu says life has not been easy since they lost their employment on 10th November this year.
CFO is a contractor who engaged the workers to work as sugar cane cutters at Kafue sugar.

[Muvi TV

THE Chamber of Mines of Zambia has recommended that the Government should appoint an independent international auditor to carry out compliance audits to address concerns expressed by stakeholders and members of the public on whether the mining companies are honest enough in their voluntary declarations.

Chamber general manager Frederick Bantubonse said in a statement obtained in Kitwe yesterday that it was imperative that assertions by some parties were addressed and subsequently appreciated.

Mr Bantubonse noted that in January 2008 late president Levy Mwanawasa told the nation that the Government had discovered that effective tax rate in Zambia was the lowest in the world at 31%.

The Government then wanted the effective tax rate to be increased to 47%.

He explained that after the budget was presented to Parliament in 2008, which proposed to introduce, among others, windfall tax, the mining industry contracted tax consultants to advise on what the effective tax rate would be once the new tax measures were introduced.

The consultants informed the industry that the effective tax rate would be well over 80% far above the 47% that was targeted by the Government.

“The perception by many people in Zambia seems to be that the abolition of windfall tax means that mining companies have been exempted from paying taxes,” Mr Bantubonse said.

He said it was not the case as mining companies pay other taxes including company tax, minerals royalty tax, Value Added Tax, and others.

The company tax at 30% of profit, in particular, would increase greatly once carry over losses and capital allowances are liquidated and more mining companies become tax liable.

“There is still, therefore, a form of windfall tax in operation called variable profit tax which is based on profit and is triggered when a mining company makes operating profit of over eight per cent,” Mr Bantubonse explained.

He said in view of the misunderstanding, the chamber was recommending to the Government to engage an independent international auditor to carry out compliance audits.

Efforts to get mines minister Wilbur Simuusa and his deputy Richard Musukwa failed as their mobile phones were not reachable by press time.

[Times of Zambia]