Zesa switches off Sable over $30m debt

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The Zimbabwe Electricity Supply Authority has cut off power to Sable Chemicals over a $30 million debt forcing the fertilizer manufacturer to suspend operations.

As a result most of the workers have been sent home.

Sable Chemicals employees said the power utility cut off electricity during the Easter holidays and by yesterday it had not been reconnected.

This is the second time since January for Zesa to disconnect supplies to the sole ammonium nitrate-producing company to force it to settle its ballooning debt which has been accumulating since the advent of dollarisation.

Following the blackout, the firm sent most of its workers home and was operating with only critical staff as they battle to get power supplies restored.

A member of the workers’ committee who refused to be named said most of the workers were at home as uncertainty over their future persists, with management saying power tariffs were too high and unaffordable while Zesa is demanding its money.

Kwekwe district Zesa credit controller Innocent Chako refused to comment except to say: “The company needs money to be able to deliver services efficiently and therefore we will switch off all defaulting clients until they pay.”

This comes at a time Sable Chemicals has engaged the government to try and get a power subsidy because current tariffs are too high.

The electrolysis plant which consumes 115 megawatts of power per hour pays 4,5c per unit and wants that reduced to 3c.

Sable Chemicals deputy board chairman uyMisheck Kachere told NewsDay the company presented a payment plan to Zesa which it has been following.

However, he said, as a result of cash flow challenges it sometimes defaulted on payments.

“We have a good relationship with Zesa and they understand our problems, but sometimes owing to cash flow problems we fail to pay our bills on time but we are paying,” said Kachere, who refused to say how much they owed Zesa.

Sable Chemicals has come up with a plan to establish a $200 million coal gasification plant to replace the electrolysis plant which the fertiliser manufacturing company hopes will ease challenges stemming from high power tariffs.

Kachere said the plan, likely to be implemented within the next three years, will bring the organisation back to profitability and eventually allow the firm to expand and meet the country’s fertliser needs without any imports.