ADD president Charles Milupi has hailed the High Court ruling which quashed Energy Minister Matthew Nkhuwa’s decision to declare the Copperbelt Energy Corporation’s transmission and distribution lines as a common carrier, saying it sends a message to all investors that their assets are protected by law.
On Friday, Lusaka High Court Judge Elita Mwikisa quashed Nkhuwa’s decision to declare Copperbelt Energy Corporation (CEC’s) transmission and distribution lines as a common carrier.
According to her findings, judge Mwikisa said CEC was not fairly treated by the Minister who arbitrarily used his powers to declare its transmission and distribution lines as common carrier without giving CEC a chance to negotiate terms and conditions for the use of its infrastructure.
And in an interview, Milupi said the judgement of the court was a reflection that Nkhuwa’s decision was so bad that the court could not find in his favour.
He added that this was the outcome for ministers who made decisions not properly advised by their legal advisors.
“When the Minister took that decision to declare the assets of CEC as common carrier, we said at the time and we were very clear that it was wrong. We also said it was going to cost this country. We also said that the issue of KCM, that’s what triggered this issue, was partly mishandled by this government. The way it was handled with government coming in and liquidating the company but still continued to operate it, that was wrong. Now in their effort to continue to operate, they wanted free electricity. And to get that free electricity, they had to get Zesco to deliver that electricity. So in his wisdom, the minister now decides to declare the CEC assets as common carriers so that Zesco can deliver free power to KCM,” Milupi said.
“But the protection of property rights is enshrined in the law of this country. Those assets are owned by Copperbelt Energy Corporation. And in terms of their delivery of power to their customers, there are certain commitments that they have made in the Power Supply Agreement. So it was an ill-advised decision. When ministers make decisions not properly advised by their legal advisors, this is the outcome. For me, that’s the reflection that the decision was so bad that the judiciary or the court could not find in favour of the minister. Because if they did that, it would have sent a very strange message to all those who are planning to invest, to all those who are trying to put up projects in this country. Because it meant that your rights to those assets are no longer guaranteed. This court judgement resets that. And I think it is a good judgement for Zambia. It has sent a message to all investors that your assets are protected by law.”
Milupi also made some suggestions on the way forward for CEC and Konkola Copper Mines (in liquidation).
“First of all when they (CEC) went into this mitigation, KCM owed CEC USD144 million. That has to be paid. Secondly, if KCM wants to continue to receive power, they have to recognise that that power has to go through the CEC assets, the transmission and transformers. In order for that to happen, either KCM, the Power Supply Agreement they had that had expired, either they renew that contract on terms agreeable to both sides so that they can continue to receive this power. But if they have insisted that they want to get power from Zesco, Zesco then has to negotiate with CEC on how their power would be delivered through the CEC’s assets into KCM. It’s a straightforward issue. So the choice really is, KCM go back to CEC, sit down and renew the contracts they had or if they want Zesco to provide them with electricity, then Zesco and KCM must go back to CEC and negotiate a wheeling arrangement,” said Milupi.