ALLIANCE for Democracy and Development (ADD) president Charles Milupi says the move by Zesco to sign a long term power supply agreement with Konkola Copper Mines Plc (KCM was done out of vindictiveness and only meant to supply free power to the mine.
In an interview, Milupi noted that it doesn’t make business sense for Zesco to go and sign a contract with “a customer of its customer” even after the said mine has gone rogue by failing to meet its obligations.
“I think that statement indicates clearly that this whole move for CEC, KCM, Zesco [and] government comes out of vindictiveness because for them to say CEC had a monopoly on the Copperbelt, it doesn’t even sound like a proper business statement. The point I am making is this, I am a farmer, I grow tomatoes. Natasha buys my tomatoes wholesale and then goes to sell them at Soweto market but that bothers me who is a farmer who sells them at wholesale because I can say Natasha has a monopoly when Natasha is selling my tomatoes? If there is any monopoly, monopoly belongs to Zesco and CEC with respect to the supply of electricity to the mines on the Copperbelt. It doesn’t just belong to CEC but it belongs to whoever benefits from that and as it happens, whatever money CEC makes out of the mines, two thirds goes to Zesco, one third remains with CEC. So how can Zesco then be talking about monopoly of this particular company?” Milupi asked.
“If you are a trader and you buy things from me or you are selling to people, when they are not paying you so that you can pay me, then I knock you out of business and then I go direct to them to supply, am I normal? This is why I am saying this is not behaviour of a business venture, there is something behind the scenes, it’s not normal. So these are the people who are all going to be sorted out. It does not make sense for PF, it does not make sense as a business undertaking for Zesco to take on a customer that was being supplied by a customer who turned out to be a rogue for not paying you take them on and you think they will pay. Within a short time, you will come back to us.”
He said despite the action, over US$100 million of the US$144 million which KCM owed CEC belonged to Zesco, adding that Zesco did not have the capacity to collect debt from the mine.
“And because CEC is a private company, they have capacity to collect, Zesco have no capacity to collect from a rogue customer for example like KCM. That US$144 million that you are hearing that they are owing CEC, over US$100 million of that is Zesco money. When Zesco now takes this, can anyone in their right mind imagine that Zesco will now be able to collect from KCM? When you have this liquidator who is playing PF roles, playing government role, is it true that they will collect that money? They will not be able to collect it, they will continue supplying power to KCM for free. When they are supplying that power for free to KCM, and we are talking about fat sums of money, on the accounts books of Zesco, there will be a shortfall which was supposed to be sealed by this KCM money because of the shortfall, there will be need for someone to find, who is that good person going to be? The way this PF government works, it is the consumers of electricity wherever they are, they may be in Nakonde, they may be in Chadiza whether there is electricity, the electricity tariffs will go up,” said Milupi.
“Then they will say if we don’t do this, [if] we don’t raise [money], Zesco will not be viable because now they will have a customer not paying. When CEC was supplying, because it’s a commercial arrangement, they made sure, that is why you had this correction or limitation of power. It is not undertaken lightly. The people who are going to pay the bills of KCM will be the ordinary Zambian, you will be paying more to cater for KCM who are not paying.”