Govt mulls power tariff increase

Minister Undenge

Minister Undenge

Zvamaida Murwira Senior Reporter
Government is considering hiking power tariffs, saying the decision by the Zimbabwe Energy Regulatory Authority (Zera) to refuse an increase ought to be revisited, Parliament heard.

Energy and Power Development Minister Samuel Undenge told Senators last Thursday that while Zera shot down a proposal by the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) to review power tariffs, Government was of the view that the electricity providing firm had a genuine case for such a proposed hike.

He was responding to a question from Mashonaland Senator Damien Mumvuri (Zanu-PF) who sought to know if there would be constant supply of electricity given that Zesa Holdings had been denied the right to raise power tariffs.

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“The ZETDC made an application for tariffs to be increased. They applied to Zera. After their tariff was considered, it was denied. Indeed, they had explained that they had a challenge in terms of the revenue that they collected and wanted it increased.

“Zera denied them, citing that other measures could be adopted. When we also considered it, we realised that the tariffs were low and it would be good for them to increase but those who are responsible for regulation said that when it comes to ease of doing business, it would be difficult for businesses as well as domestic consumers,” said Minister Undenge.

“Indeed, there is a point that it is better to have expensive power than not to have it at all. So, this is an issue that we are seized with and we want to balance the revenue that we get from Zesa and ensure that there is a constant supply of electricity because there is nothing for free. We are working on the issue with the respective parastatals.”

The current power tariff stands at 9.86 US cents per kilowatt hour after ZETDC had applied for a hike. ZETDC had proposed that the tariff be increased to USc 14.6 per kWh which was granted by ZERA but reduced to USc11.2 kWh mid-last year. The figure was later frozen after industry complained that the tariff was too high to sustain their operations.

The regional average is USc14 per kWh.

In a related matter, the Finance Bill which seeks to give legal effect on several fiscal measures announced by Finance and Economic Development Minister Patrick Chinamasa sailed through in the National Assembly on Thursday.

The Bill now awaits transmission to Senate.

Minister Chinamasa made adjustments to the initial budget estimates that he presented last year by allocating money to the Parliament of Zimbabwe and state universities.

He said there would be a provision of $50 000 on Constituency Development Fund.

Commenting on Chinese mega deals, Minister Chinamasa said they remained the best despite some conditions like the requirement that most raw materials should come from Beijing.

“The requirements of Chinese financial institutions are that when they lend us money, the contractor must be Chinese and the equipment must be sourced from China. We then remain with little, which we can use to source local materials. When you look at the Cost Benefit Analysis, we want power and the sooner we can start on those projects, the better and it is the only country where we can borrow from right now. So, we decided we take the loan, notwithstanding the restriction on where to source equipment and where to source the contractor. I must say, this is also the practice of most countries. They do not give you money to pay to companies from other countries,” said Minister Chinamasa.

 

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  • haiwawo

    Bunch of desperadoes.

  • Major Musango

    Mr Undenge needs to come back to and start living in Zimbabwe

  • nelson moyo

    At 9.86 US cents per KwH in Zimbabwe means that Zimbabweans are getting some of the worlds cheapest electricty.
    This certainly cannot last if we expect to have more and reliable power

    • moyo

      It can last because the cost of generating hydro power is 4 cents per kWh.Power from coal costs 8 cents per kWh to generate.So we go for a power mix with more hydro e.g. build Batoka power station now.

  • John Shumba

    Who is going to afford chimbofungayiwo wa Minister you are not reasoning at all. This country needs thinkers who can think outside the box and come up with alternatives. Awa wana th th th wapererwa

  • haiwawo

    A little increase here, a little VAT on meat, force schools to deposit money into a bank where parents have no say over how the money they pay for their children is used – the list goes on. Yeah, that is dysfunctional Zimbabwe.

  • Njenjema

    From traffic offences spot fine increase to vehicle tests now this! Ma1 chaiwo. do u also consider the regional average Salary for citizens? Where we have higher than regional average price eg DATA tarrifs u dont scale down. A dollar for herald news is still higher than regional average. Everything is heaped on the consumer and then you go on to say you have pple at heart, NO u dont.

  • moyo

    If government overrides ZERA then shut down ZERA and just do it the old way!
    the cost of generating hydro power is 4 cents per
    kWh.Power from coal costs 8 cents per kWh to generate.So we go for a
    power mix with more hydro e.g. build Batoka power station now.I am an engineer aged 56 years old and I still insist it is very possible to supply affordable power in Zimbabwe.

    • nelson moyo

      Nobody will lend Zesa money to build Batoka unless it is a profit making operation – once again simple business practice Moyo – ZESA accounts show that it is an insolvent company – like most parastatals in ZW

  • nelson moyo

    If you cant pay Zesa for electricity how can Zesa continue to feed power to you ? Zesa itself has to pay its supplier and this is how basic business operates CONCERNED – Zesa must switch off all people who do not pay – if Zesa does not do this very soon Zimbabwe will be back to candles and wood stoves 24/7

  • nelson moyo

    20 diesel generators cost money Simweena – and US dollars at that !

  • nelson moyo

    Good for you Zootopia !