Massive increase in power tariffs looms

zesaowedGolden Sibanda Senior Business Reporter—
ZIMBABWEANS could face the biggest increase in the cost of power since dollarisation after the Zimbabwe Electricity Transmission and Distribution Company proposed a 5 percent tariff increase, way above the inflation rate which stands at 4.3 percent. ZETDC made the proposal during a tariff review stakeholder consultative meeting, also attended by fellow Zesa Holdings subsidiary — Zimbabwe Power Company —with the Association for Business in Zimbabwe in Bulawayo late last month.

ZETDC said a marginal increase in the tariff will be detrimental to its operations in the long-term.
It said a 5 percent increase was in line with inflation.

The firm said only one significant increase had been effected since dollarisation of the economy in 2009.
“Average expenditure has been higher than the average tariff awarded. Tariffs awarded (are) not sufficient to sustain the minimum activities of the utility,” said ZETDC.

A tariff of US9, 83c per kilowatt hour was awarded in 2009, but was reversed and replaced by a US7,53c/kWh in February 2009. There was no tariff hike in 2010 while a US9, 83c/kWh raise was approved for 2011.

ZETDC said there was no tariff change in 2012 with a 0,3 percent increase to US9,86c/kWh effected in 2013 as the utility made losses since 2009.

The tariff hike request, the firm said, was meant to enable mobilisation of resources to fund plant and network maintenance backlog, correcting distortions in the current tariff, with the current cost of running the business at US10,51c/kWh.

The 5 percent tariff increase proposal is based on a US$986 million revenue requirement, which ZETDC said was in line with its 2014 planned expenditure.

It said the proposed tariff was premised on the rate of return methodology, an approved methodology widely used by other power utilities internationally.

The company pointed out that while its revenue requirement is based on budgeted expenditure, the effective electricity tariffs should be cost-reflective covering efficient costs of its operations only.

The power utility’s proposals may however meet stiff resistance from already burdened consumers some of whom believe that there are flaws in ZETDC’s model, pertaining to alleged inefficiency (and its effect on cost) as the utility is not splitting the various customer types in the cost of supply model.

“I believe we should present an analysis of this, possibly by using the relationship of various supply types (188, 33, 11kVA, domestic etc) from other countries,” said one captain of industry in mining.

ZETDC has since lined up a number of measures to improve efficiency and these include installation of statistical meters to help manage losses.

There will also be migration to pre-paid meters to reduce customer service costs, network system upgrade and refurbishment to improve on transmission network reliability and help reduce losses.

Further, there would be upgrading of billing system and minimising staff costs by keeping staff strength at 80 percent of requirement while cost centers will be managed down to depot-levels.

It is expected that this will result in improved service delivery, value for money, better infrastructure maintenance and availability, improved power supply security through generation expansion projects and viability of the utility.

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  • Tshaka

    How much are the Company’s Executives paid per months including their many fringe benefits?God help us please.

  • AngryZimbo

    lol , this is very funny first you slash peoples debts ( as a campaign promise) now you talk of massive power tarrif hike surely do you think we are that Blind !! Surely people know nothing is for ” free”

  • Mimi

    Zimbabweans would surely have no problems in having ZESA to increase its tariffs so long as this would result in residents getting unlimited power supplies. This issue of having an increase in tariffs and standards still falling is what irks everyone. On top of that it will not be surprising to hear that the increases being suggested are to cater for the top management to get huge salary pecks and nothing to ensure that the consumer gets their money’s worth. How about ZESA starting by justifying their increase and ensuring that electricity cuts become a thing of the past.

  • joemuda

    Your headline is too sensationalised, there is really nothing massive about a 5% increase Zesa tariffs.

    • norest

      I am sure you are getting an OBSCENE salary in ZESA!!!

    • Mai Fatso

      As long as the increase iri equal or higher than inflation, then its massive.

    • Gari

      I nearly collapsed when i saw the head line. Kutyityidzira vanhu by wrting MASSIVE in bold. While the increase is not welcome, I wanted to say exactly that…

  • Nkosi Mambo

    They should first reduce their salaries to $5000pm for the highest paid. From there they can begin talking about increasing tariffs.

  • Onslo Mukundi

    Crazy…Hatina mari dzacho idzodzo. You can increase 10 times but hatina mari fullstop

  • kona

    thought inflation was less than one percent Editor

  • mandimbandimba

    Before u implement the new tarrifs.fisrt investigate zesa on the obscene salaries they are giving one another.Otherwise our money will be going towards funding their huge salary bill,not electricity as they want everyone to believe.

  • Mai vevana

    No salary schedule no increase….

    • Kusvikazvanaka

      There is rampant corruption in this company called zesa. front office personnel ask for bribes for anything they do. This is a known fact. Besides their huge salary bill, zesa is so inefficient to the born. Zimbabweans have been in the blackouts/load shading since 1998. What on earth are the so called business managers doing? Nesuwo maZimbabweans takanyanya kupusa. tinoitwa madiro chero nevanhu vatinobhadhara masalaries. It has become so bad that even mwana anoenda kugrade 1 akutoziva “Kuvhara”…it is going to take DECADES to normalise such a situation…now mumaChurch yangova corruption as well….asi kusvika rini nhai vanhu.

  • logic

    More money, more ka-ching in their pockets to: buy and build their mansions, send their children to all the private schools and oversees universities, buy the best medical care possible and go for shopping and excursions wherever the heart desires.

    Kutyei, when it is a monopoly where they can charge whatever they want even when the poor consumer does not enjoy the services they are paying for with the frequent power cuts?

    Kutyei, when the leaders who should stand up, speak out and be counted are conspicuously silent but instead send minions like Charamba to do damage control when he himself is also implicated in the rot through the abdication of responsibility and dare I say, pfumbamuromo which he got as board member? The leadership is tarnished and have withdrawn to their laager. That is why these things are happening with impunity because hapana achakwanisa nodzora mumwe. For the very top leaders in all strata of the nation, it is a case of gouge the nation and the masses while you can.

  • jojo from zesa

    havanyari apa masalary avo aripamusoro soro,,,,,,, vanoda mari yekutambirasana yakawanda zvakare……………watch out in space. they are getting obscene salaries as well

  • murambinda

    haiwawo vana ZESA tibvirei apa, tariff increase, tariff increase, makamboiteiko…..

  • hoha

    havanyari apa masalary avo aripamusoro soro,,,,,,, vanoda mari yekutambirasana yakawanda zvakare……………watch out in space. they are getting obscene salaries as well…..to me this is bull sheet

  • Progressive Zimbabwean

    The issue with ZESA is that they are top heavy and their salaries are way beyond what the economy can afford. There are lots of ineffiences that if corrected could reduce the cost of power production to manageable levels. A bloated bereucracy is what is killing ZESA in addition to other factors such as politicians who do not want to pay for the services they receive and to a lesser extent thefts of power from the grid and inefficient distribution network that results to power loses. We also have old power generating plants which require modernisation and replacement.

  • james

    these guy wl never learn from cathbert dube and others. Mavakuda kutibira futi. Hamuguti here?

  • consultant engineer

    IOt ios not only obscene salaries giver tp executives, there ois corruption, possibly the worst in the country.
    The pre paid meter scam is not compulsory but was engineered to increase taffifs and siphon funds into private bank accounts.
    police, serious crime,fraud have taken statements from executives in ZPC and await instructions from the prosecutor.
    Media shou;ld ask questions by example.
    Who won the secret 50 million tender for the importation of prepaid meters?
    Which private companies install them?
    How much of the revenue is kept by the private company?
    How much commission is paid to the vending company distributing the top up cards?
    Ask the above and you have caught the senior executives of ZPC redhanded.
    All their personal assets internal and external should be frozen and forfeited.
    Now lets lokk at cost of production of power.%
    Harare power station, at 20 % output they cover all cost from an internal costing exercise.
    Thus they make 80 % profit, no private company is allowed to loot like that..
    Harare power station makes a million dollars a month profit currently.
    Where is all the money – senior executives.
    When the CEO was fired for negligence he got a 3 million package

  • Jotham

    This organisation(ZESA) is led by thugs and gangsters who think moneys is plucked from trees. At ZESa we need a real fresh start. The whole lot is incompetent. They are paid astronomical salaries. With all the difficulties people are going through , the Govt. must stop lunacy being peddled by useless company. Nxaaaaaaaa.

  • Top 5

    Directors at ZESA earns $7000 or less Managers 4 500 OFFICERS 2500.Remember their actions are controlled ,proved and signed with the Ministry of Energy. No obscene salaries what so ever, it does its best to minimize costs. THOUGH NON OF ITS EMPLOYEES EARN anything below pdl

  • masvukupete

    Very simple really. Publish the audited statements to prove to us that there is really a requirement. Publish the salaries per grade and number of people per grade. Also publish how the different area are manned, compared to international norms either per kWh distributed (since half the time it is darkness) or per household. These are the sort of things a good CEO would do in this time to be successful. Some CEOs should be looking at these corruption events as an opportunity to be the first choice in public appraisals to help their organisations forward.

  • Tapfumaneyi

    Much like the Councils, after being forced by Zanu-PF to write-off past debts for electioneering purposes, what choices do they now have to reconstitute their treasury to enable future investments (or continued looting)?

  • bibi

    yes. they should show us thier salary schedule FIRST

  • Tafa

    Now that I have a prepaid meter and I’m paying for my power consumption in advance, Why do we still have load shedding? Where is the prepaid money going?

  • Sensitive

    Ngavatiratidze salary schedule first…dakutityisa nekukwidza magetsi…vakutoda zvavo kuwedzerana mahefty salaries

  • Disaster

    This is a sad moment for Electricty Users why should we rely on ZESA so much nesu vanhu we are not innovative to embrace new technology such as solar for lighting, gas for cooking and heating and let us leave ZESA towona kuti vano udza ani these International model of electricity pricing. Let us start thinking out of the box!!!!!!

  • mamo

    Lets see the salaries of the executives first……How do you justify increasing tariffs when there are power cuts almost everyday…give us a break!!!!