Zesco, a conduit of govt extortion

Zesco management says it would like to implement an electricity tariff increment of 91 per cent in one single phase, adding that they are not being greedy by proposing, but need to cover operational costs and survive.

According to data availed by Zesco the utility hopes to generate over K16 billion revenue within the first full year of implementing the controversial tariffs. Meanwhile, the Energy Regulation Board (ERB) says it uses internationally-accepted regulatory principles to determine the performance of Zesco before approving any of its tariff increase applications. The regulator insists that it is not automatic that when the utility applies to increase the cost of electricity then permission is granted without question.

“This is not the first tariff review that the ERB is going to preside over. Since inception, the ERB has basically presided over about 14 tariff adjustments. And these adjustments are carried out on the basis of internationally-accepted regulatory principles in electricity tariff determination. So, that shows you that the ERB actually does carry out its own independent examination of the tariffs, and based on facts, before the Board makes independent decisions. These public hearings are not a mere academic exercise,” claims ERB electricity regulation manager Rodgers Muyangwa.

What Mr Muyangwa is saying may be very true, and in fact, it makes academic sense. But what is also true is that there is no State regulatory authority that operates independently in Zambia. To say that the ERB will independently review Zesco’s application for a tariff increase after hearing public submissions and considering their performance is a mockery to the enlightened consumer. If ERB followed public submissions and concerns, or should we say, if the public had a say in the amount of money they should pay for Zesco services, the company would not be abusing the resources in the manner it does.

What Mr Victor Mundende and his managers at Zesco are proposing to do is very heartless. Only human beings who don’t pay for electricity can sit in a meeting and agree that it is normal, in their wisdom, to demand a 91 per cent tariff increase from consumers who have not yet recovered from the 75 per cent increase less than 18 months ago. In this harsh economy, where does Zesco expect people to get money from?

When increasing tariffs by 75 per cent in 2017, they said: “We don’t want to be increasing tariffs every year, so the 75 per cent is meant to cover for a longer period to come without any rise in electricity charges.” What has changed today? How did you use the 75 per cent extra that you are still getting from customers? You can’t go back to blame everything on the low water levels and kwacha depreciation. It doesn’t make sense!

How come when the kwacha appreciates, Zesco never calls for a press conference to announce a reduction in tariff charges? This is what people are complaining about. No matter how well the economy performs, Zesco tariffs are always revised upwards, and never downwards, like the case is with other services and commodities. Is this not stealing from helpless consumers?

It is sad that people are failing to admit where the problems are. Zesco is under pressure because of the huge government loans contracted, which the country is now failing to pay back. That is why the utility has discarded its own Cost of Service Study, which would provide evidence on how much Zesco actually spends on generating electricity. They don’t want consumers to know, but they are in a hurry to impose new tariff increments. They are looking for all sources of income. In the process, they are plunging citizens into misery! People are suffering out here! How will farmers who have not received their payments pay for electricity? How will the public workers whose salaries are being held by government pay for electricity?

It is painful that while ordinary consumers are sweating their butts off, to sustain the operations of the utility, the politicians view Zesco as a fat cow ready to be milked at every moment! We know that whether Zesco performs well or not, whether the public complaints are genuine or not, the decisions to increase tariffs are made by politicians. If State House decided today that Zesco tariffs must be increased by 25 per cent, and ERB objects to that application, heads will roll at the regulatory authority! But please, for once, listen to the cries of the people.

A house is more important than having electricity, but not even an abusive landlord can increase rentals by 75 per cent within a year and then come back to claim another 25 per cent increment every other year. No matter how caring you are as a landlord, there is no tenant who can appreciate a justification that the owner of the house needs more money to survive the harsh economy.

So, what Zesco is doing today is to extort money from the public because they know that there is nowhere else consumers can run to, like an abused tenant would simply do. But Zesco must prepare for a very tough future because every monopolized business eventually gets to be challenged. Look at how the mobile telecommunication companies have suffered with the advent of Internet calls? Who knew that a time would come when people would be able to stay for months without making direct Airtel, MTN or Cell-Z phone calls?

Today, people are having to make a decision between spending close to K1,000 per month for DStv subscription or buying data and turning to Netflix, which costs less than K150 per month for all their entertainment needs, who knew a day would come when Pay TV monopoly would be challenged by other means?

So, a day will come when people will learn to survive without Zesco, and if these politicians lack vision, that milking cow will join Mulungushi Textiles, Kapiri Glass Manufacturing and Mansa Batteries in the grave!

         

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Zesco and the Principal in this case Government need to be extra cautious on this move, they may not be fully aware of what is on the ground with the affordability by consumers and the the anger and resentment which will arise there from.

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