Alliance for Democracy and Development (ADD) president Charles Milupi has challenged government to disclose the source of the money that will be sued to import power from South Africa’s power utility, Eskom.
And Milupi says political interference in Zesco, among other parastatals, remains a hindrance towards the stability for State-Owned Enterprises (SOE) to generate profits and manage operations professionally.
Last week, Energy Minister Mathew Nkhuwa announced that the long-awaited 300MW power import from Eskom, worth an estimated US$20.5 million per month, would finally be made available to Zambia.
His Broadcasting and Information Services counterpart Dora Siliya, however, disclosed, Thursday, that Zesco and Eskom had still not yet reached an agreement on one aspect of the deal, despite the money being paid already.
In an interview, Milupi challenged government to disclose the source of the money.
“So, when they say they have secured the money, where have they secured it from and at what cost? They should be open with us the Zambian people; at what cost? Where is the money coming from? Is it loans? If it is then we are doing exactly what we have been advising against that you contract external loans for consumption purposes because that will now be consumption, but the bottom line is that in terms of economic management what the current 2019 budget tells us is that the PF have totally failed,” Milupi said.
“It is terrible because the budget that we are operating under right now up to 31st December, 2019, it’s severely stretched! It’s already a massive deficit budget. The President (Edgar Lungu) himself when he was addressing Parliament said over 90 per cent of the budget for this year was going to two line items: debt servicing as well as paying emoluments. So, all they have is less than 10 per cent to do all other things. And one thing is that even when we say that, that budget had already 30 per cent foreign funding incorporated in it, which they have failed to secure. So, when you remove that, it’s a lot worse than even what the President said.”
And Milupi lamented that Zesco’s challenges were as a result of political interference.
“You know, I am sympathetic to Zesco because the issue with parastatals and Zesco at the moment is the biggest parastatal after the demise of ZCCM as we knew it. So, it has suffered more from political interference so instead of now being run professionally, they have suffered more from politicians directing them on what to do, who to employ, who to give a contract and so on. The moment you allow this excessive political interference in any organisation, they stop functioning the way they should function. As a company, the focus of management should be on running that company properly. And you see, it is no individual wisdom in running a company, there are certain benchmarks that ought to be followed. This is what guides chief executives, it’s not that ‘no, because I am not chief executive or managing director so I will run it,’ no! There are certain things that guides you in what you perform. In other words, what are the deliverables? So, then you have a board of directors that monitor management to ensure that they are delivering, according to those deliverables,” he observed.
“So, because it is a supply company, you want to make sure that they are supplying the commodity that they are supposed to supply at very high standards; it must be available; it must be on the market at all times. Now, in management, when you look at a company like that, you expect returns of not less than 15 per cent on an annual basis. So, if it was running properly, they would be paying to government something not less than US $200 million every year as dividends. Now, no parastatal is doing that and people in government don’t seem to care, the boards don’t seem to care because if we were asking for these deliverables, we would be getting that, but in order for them to give those deliverables like dividends, they have to make a profit. Now, how can that profit come, it will come from good management of financial resources. It means when you buy things from suppliers, you pay them. What you have talked about Eskom, when you buy power from them, you pay them, from Mozambique, you pay them. But in order to do that, you have to streamline your operations, make sure that your costs are optimum.”
He noted that if Zesco was ran as it should, the utility would have surplus energy in reserves to cater for emergency power.
“We expect that when there’s shortage of generation capacity, they would have reserves. Just like a country has reserves, companies also have reserves. They would have reserves to be able to import power even when they are keeping the tariffs at the same range. But because of the way they are being abused, financially and operationally, they do not have those reserves and that is why you have load shedding and so on, that is (how) you are unable to import because the people you are supposed to import from, you already owe them money,” said Milupi.
“Because of this political interference, you have professionals who are perceived to belong to certain regions because you come from the same region, already, there is an attachment that you must have, you are assumed to a certain party even when that is false, they are retired in national interest. When you retire people with experience and then you bring in people who are employed, especially as cadres with no experience, something suffers and what is that? The ability of a company to operate normally and that’s what we are seeing, the people who are running this company, these are professionals, if you target them properly that you want this or you want that, they will deliver because we went to the same colleges; we went to the same universities as them so they are able to do that. So, remove political interference from ruling parties into these parastatals; that is the solution.”