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Scrap Zesa – industry

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The government should “scrap” Zesa Holdings, restructure entities currently operating under it and privatise all power generating stations if it entertains any hopes of turning around the fortunes of the ailing power utility.

The Zesa debt is estimated close to $1 billion while it is owed about $450 million by consumers.

Speaking at a portfolio committee on State Enterprises and Parastatals Management public hearing in Harare yesterday, Energy and Information Logistics group director Engineer Francis Masawi said Zesa Holdings should be restructured for it to be efficient.

Under the proposed restructuring exercise, bulk energy trading should be taken over by private sector power brokers in a Zimbabwe Electricity Transmission Company (ZETC) bulk energy market.

Zesa Holdings currently owns four subsidiaries in Zimbabwe Power Company (ZPC), Zimbabwe Electricity Transmission and Distribution Company, Zesa Enterprise (Zent) and Powertel.

The government through Zimbabwe Electricity Distribution Company (ZEDC) and Zimbabwe Electricity Transmission Company would maintain its 100% ownership but be made to compete with private sector distribution businesses.

“Zesa Holdings Ltd should be scrapped and the three licensed companies report directly to the government,” said Masawi.

“ZPC should be given a time-frame for the privatisation of each of the generating power stations. Retail supply business must be run by private sector companies so as to make the ESI bankable.”

“Powertel and Zent should be privatised so that they can compete properly in their areas of specialisation.”

He said there was a need to come up with a national vision to guide all public and private sector enterprises and society towards agreed common developmental goals.

“The energy sector needs an energy policy. Urgent appointment of Commissioners to ZERC so that the Energy Regulator can play its role of ensuring overall energy sector efficiency, viability and sustainability,” said Masawi.

Masawi said an independent technical and business due diligence should be carried out to determine suitability of the current Zesa structure to deliver services reliably, efficiently and affordably.

The new organisational structure should then be directed by experienced boards with clearly defined performance compacts with shareholders.

The performance compacts, to include detailed on-time reporting requirements, said Masawi, should be biased towards making the whole electricity sector efficient and to run on viable commercial lines for sustainability.

He said Zesa subsidiaries currently owed each other money, a development that has curtailed its efforts to rehabilitate power stations and the ability by the country to import power.

Masawi said the country would require $2 billion to produce an additional 1 000 Megawatts (MG) to get back to the pre-year 2000MG consumption levels.

Use of smart-meters and smart-grid technology is also expected to provide energy management information required to efficiently utilise available energy through industry-wide load management.

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