INTERNATIONAL Trade economist Trevor Simumba has challenged Energy Minister Mathew Nkhuwa to make public the Statutory Instrument by which he declared all transmission and distribution lines in the country, including Zesco’s, as Common Carrier.
In an interview, Simumba said he was both shocked and intrigued to hear the minister boldly make such a statement when there’s no evidence in the public domain to support such a claim.
“Section 15 of the Electricity Act of 2019, which the Minister quotes clearly states that a transmission or distribution line becomes a common carrier when declared so by a Statutory Instrument signed by the Minister, but the only Statutory Instrument I have seen is SI 57, which declared all of CEC’s (Copperbelt Energy Corporation) transmission and distribution infrastructure common carrier,” Simumba said.
He argued that it should not be difficult for Nkhuwa to produce the SI to substantiate his claim.
“Our energy sector attracts a significant amount of foreign donor support. The programmes Mr Nkhuwa mentioned in his statement such as GETFIT are heavily-funded by cooperating partners. I wouldn’t be surprised if those partners have indicated to our government that they would discontinue funding. That would explain why the Minister is now trying to walk back the arbitrary actions he has taken which, frankly, do not only scare away private sector participation in energy, but also dent the international image of Zambia as a destination for foreign investment generally,” he observed.
Simumba warned that the consequences of government’s hypocrisy in the power sector that he himself had earlier sounded alarm on were now starting to show.
“You can’t claim to want to attract private sector participation, yet at the same time take adverse actions against an existing, credible and Zambian private investor and expect that you would be believed to be genuine,” he said.
He said government should not interfere in commercial covenants and impose harmful terms to private sector investment, but focus on providing a conducive environment where commercial arrangements between commercial entities could be amicably discussed.
“The Minister talks of power sector development, the need to address power deficits and a commitment towards the promotion of private sector participation in the development of a robust, diversified and secure power sector in Zambia – how exactly does he see this happening in light of the expropriatory actions he and his government are taking?” wondered Simumba.
He reiterated his challenge that Nkhuwa showed the nation the SI by which he declared Zesco’s infrastructure as Common Carrier, and whether the terms reflect those of SI 57, particularly with respect to the terms on which an enterprise wanting to use Zesco’s infrastructure, being determined by the Energy Regulation Board (ERB).
On May 29, Nkhuwa issued SI 57 by which he declared all of CEC’s transmission and distribution lines common carrier.
But several stakeholders interpreted the controversial move as having been done to enable Zesco use CEC’s infrastructure to supply their newly-acquired customer, Konkola Copper Mines (KCM) Plc, after KCM refused to enter a new Power Supply Agreement with CEC but instead signed a binding term sheet with Zesco on the same day that Nkhuwa issued SI 57.
KCM has been evading a US $145 million electricity debt owed to CEC after failing to settle its invoices for power consumed over a one-year period.
This followed Zesco’s failure and refusal to agree to a new Bulk Supply Agreement (BSA) with CEC after their 23-year deal lapsed on March 31, 2020.