We are hearing from very reliable sources that Zesco, with the government’s facilitation, has engaged the Copperbelt Energy Corporation (CEC) for negotiations aimed at extending the power supply agreement under new terms, after plans for a compulsory takeover of the business have flopped. This is a good development, but we have a message for whoever is pushing the agenda to grab this corporate institution from its rightful owners.
From the time government announced that Zesco would not renew this power supply agreement with CEC, we have been asking questions: what will happen to the mines and domestic consumers who are on the CEC grid once this power uptake contract comes to an end? We were asking this because it is public knowledge that CEC owns the power supply infrastructure to the mines on the Copperbelt.
Those in line ministries came out very strongly to defend the decision, saying government would ensure a smooth and uninterrupted supply of electricity to the Copperbelt mining industry, even without CEC on board. Little did we know that these people in government had absolutely no plan. What they had in mind was a compulsory takeover of the business so that Zesco can then use the CEC infrastructure to supply electricity to the mines. Credible sources tell us that documents detailing a proposal for the takeover of CEC were prepared by some persons acting for the interest of some top bosses at the State utility and of course State House.
We understand that government officials became split on this proposal, with those opposed warning that the market reactions to such a development would have adverse implications on the economy and might well be the undoing of the Patriotic Front.
It is now clear that since the takeover plan that Zesco and government were banking on has either been overwhelmingly objected to or is implausible to execute, they are now caught between a rock and a hard place. They fear that this may negatively affect their fortunes for re-election in 2021. That is why they have now given in to negotiation. We hope that the negotiations will be done in good faith and fairness so that they don’t find any excuse for reverting to plans of taking over the business.
We have a message for those in government who have a tendency of grabbing private businesses. It’s not like every institution that does business in Zambia belongs to you. Where is this false sense of entitlement to all business entities coming from? The fact that you are in government or have powerful government connections doesn’t mean you can just take a walk in the private sector and grab businesses at will. You are destroying the country and killing investor confidence!
How can you go for compulsory acquisition of a company that is listed? What kind of a people are these who never learn from their numerous mistakes? Look at what happened in the case of Zamtel and LapGreeN! To date, this government has failed to settle compensation in that matter and the country’s assets abroad are at risk of being frozen.
They lied when taking over Konkola Copper Mines that they had a recovery plan. They promised that things would get better without Vedanta Resources, but they are stuck today. Investors whom they planned to bring have scampered and KCM is sinking deeper in debt. The company is failing to pay CEC for the power its consuming and now the plan is to takeover CEC as well? What a criminal regime! These people will cause a disaster for this country very soon with this kind of careless reasoning. You cannot run the economy on impulsive decisions.
We are aware that this irrational plan to take over CEC is premised on the narrative that the power utility is generating income for the opposition since ADD president Charles Milupi is a shareholder. This goes to show how oppressive, greedy and empty-headed the people behind this are. It’s not like government is not privy to the company’s schedule of dividend payments; they are well aware because CEC is not totally a private business in which GRZ has no stake.
Since the company’s privatisation in 1997, ZCCM-IH has been CEC’s second largest shareholder, currently with a 24.11 per cent stake in the company. The records are public, Mr Milupi owns such a tiny stake in CEC that he has no veto power whatsoever. So how can a take over of CEC punish Mr Milupi or the opposition?
There will be serious consequences to all these impulsive political decisions that are made at night when policy makers are swallowing happy juice.