Zimpapers Logo

Eng Magombo

Golden Sibanda Senior Business Reporter
The Zimbabwe Electricity Transmission and Distribution Company may be forced to cut its maintenance budget to rein in costs if regulators turn down its request to increase power tariff by 5 percent. Managing director Mr Julian Chinembiri said the Zimbabwe Energy Regulatory Authority was yet to inform them on what determination they had arrived at regarding ZETDC’s tariff hike proposal.

However, he said in the event ZERA dismissed the request to hike tariffs, ZETDC would be forced to cut the maintenance budget, which would compromise reliability of the transmission network.

“In the event that they do not award the tariff increase we would have to cut (costs) somewhere of which most of the costs are fixed.
“If the maintenance budget is reduced, it means that service delivery and network reliability will be low because of lack of maintenance. Maintenance is the only area where we can cut,” he said.

Contacted for comment ZERA chief executive Engineer Gloria Magombo would not say whether or not the tariff increase would be sanctioned, but would only say that an announcement was imminent.

“We will announce the determination soon. Within the next week we will make you know, our board has already deliberated on it,” she said.
Zera is yet to announce the decision since the request in February.

ZETDC had intended to request a 12 percent increase in the tariff arguing a marginal increase would be detrimental to operations in the long term, but later revised its position to 5 percent.
Zesa Holdings’ transmission and distribution arm said only one significant increase had been effected after dollarisation in 2009.
Average expenditure was said to be higher than the average tariff awarded. Tariffs awarded were also not sufficient to sustain basic operations.

A tariff of US9,83c per kilowatt hour was awarded in 2009, but was reversed and replaced by a 7,53c/kWh in February 2009 and no increase in 2010 while a 9,83c/kWh raise was approved for 2011.

ZETDC said there was no tariff change in 2012 with a 0,3 percent increase to 9,86c/kWh effected in 2013 as the utility made losses since 2009.
The hike was meant to enable resource mobilisation to fund plant and network maintenance backlog, correcting distortions in the tariff. The current cost of running the business stands at 10,51c/kWh.

There have, however, been fears that increasing the tariff would add to the cost build up for household, industrial and other commercial users already battling to keep afloat in a difficult economic environment.