Power thefts cost Zesa US$10m

Power thefts cost Zesa US$10m

zesaicture4Lloyd Gumbo Senior Reporter—
Zesa Holdings could be losing more than US$10 million in potential revenue monthly due to electricity thefts by a syndicate involving its employees. It has also emerged that the power utility is producing electricity at a high cost of about 14 US cents per kilowatt hour due to inefficiencies that see thermal energy stations wasting coal, a major raw material in power generation.

Investigations by The Herald also established that more than 10 current and former Zesa employees are involved in the power thefts, although some of them have not yet been charged and are still at work.

Massive leaks of pre-paid meter units at the power utility and from firms contracted to supply the components have seen some electricity users using power for free.

Investigations by the power utility reveal that people at more than 4 000 properties in Harare, mainly in upmarket suburbs, tampered with prepaid meters, bypassing the Zesa system so that electricity is supplied for free.

Sources told The Herald last week that a cartel of Zesa employees was clandestinely cancelling mega-bills of electricity users still on the post-paid billing system in exchange for a few hundred US dollars.

After cancelling the bills, they then install pre-paid meters without Zesa’s knowledge.
For this, they are paid between US$300 and US$600 by electricity users who want their huge bills cancelled.

“Meter readers identify consumers who owe the utility thousands of dollars. They then negotiate with those people to supply them with meters and cancel the bills. The meter reader then gets a prepaid meter either from the Meter Testing Office, contractors or depot electricians.

“The same guy then connives with customer liaison data officers, mainly at Megawatt House in Harare, to register the meter and delete the outstanding debt that may be running into thousands of dollars. They then install the meter and bypass Zesa systems so that the client is not charged for electricity.

“This could have happened with companies as well. Officers in the customer liaison data department also convince electricity users with huge bills to pay them about US$500 so that they can delete the outstanding debt.

“We have meters that were not meant for Harare that were booked at the Zesa Test Meter Office but were clandestinely installed in some suburbs in Harare. That shows they were leaked from the Test Meter Office. The scam is as plain as that, but nothing is happening to the culprits.

“It is possible that Zesa may think it is still owed US$800 million nationally when in actually fact the figure has come down if investigations by the loss control and private investigators are anything to go by,” said a source.

Another source said efforts to charge the culprits were not progressing, in an unclear circumstances.
“The problem is that there is too much nepotism at Zesa. As a result, efforts to deal with these culprits are difficult for the loss control guys and private investigators. Some of these people are related to people in management so nothing is being done against them.

“In fact, there is resistance within the power utility itself. Management seems uncomfortable with these investigations. People who have been implicated are still at work and some of them even call themselves untouchables. This is a nationwide problem,” he said.

He went on: “These contractors (firms contracted to supply prepaid units) were given leeway to get into the Zesa system so they are able to do anything they want.

“Zesa is sitting on a time bomb because when these contracts lapse, former and current employees of contracted suppliers can go on to tamper with the Zesa system at will by connecting customers without them paying a cent to the utility.”

An insider said before the introduction of pre-paid meters, Zesa collected monthly revenues of about US$70 million, with a default rate of around 30 percent.

“But that has now come down to an average of US$50 million during the prepaid era. Under normal circumstances, revenue collection should be around US$80 million monthly considering that now there should be no default to talk about. There is also the 20 percent that electricity users who owed Zesa pay to liquidate their debt. So the power utility should be collecting more, but because of poor revenue collection mechanisms it is not.

“There is also a question around the utility’s credit policy on debts because how do you explain someone owing up to US$5 000? Under normal circumstances, the national debt should be nowhere near the US$800 million being talking about because electricity supply to defaulters is cut off before the bill gets too big,” said a source.

However, Zesa acting spokesperson Mr Shepherd Mandizvidza said their employees were not involved in any such scam.
“In the event that those people masquerading as Zesa employees engage in acts of fleecing customers for selfish personal gain, then the long arm of the law would take its course,” he said.

“The power utility has its own internal disciplinary systems and security measures to ensure that customer accounts are not manipulated and workers are discharging their duties in conformity with the expectations of the organisation”

Mr Mandizvidza said some electricity users who tampered with meters had been taken to court.
He said Zesa established a revenue protection department to ensure the integrity of its systems.

Inefficiencies at power stations are also costing Zesa
Recently, Zimbabwe Energy Regulatory Authority chief executive officer, Engineer Gloria Magombo, said: “One of the key issues which came up is that obviously the average cost of supplying was coming up to about 14 US cents per kilowatt hour, which is way above the average 9,86 USc which we had given as a tariff. We looked at the processes right from production and we realised that there is a lot of inefficiencies within the processes so much that if you look at the power station, the way they are converting their coal to energy there is a lot of losses that are being incurred at that level.”

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