We don’t want to be carried away by the technical legal jargon from government ministries. This development of government declaring all of Copperbelt Energy Corporation’s power infrastructure as “common carrier” looks like nationalisation and we have not found any explanation that dismisses this fact. It would make sense to us if Zesco transmission and distribution lines were declared common carrier because that is public infrastructure.
It appears to us that the government is just ashamed to use the word nationalisation because it does not present a positive image. Nationalisation is considered a dirty word, so they don’t want to use it, that’s why they have come up with a Statutory Instrument to legalise this move, which is otherwise illegal. And this is clearly something they orchestrated long before by couching it in law with the enactment of the Electricity Act of 2019 which is the enabling Act for the SI. They knew and decided the power supply contract between CEC and Zesco would not be renewed. In fact, they must have had reached this decision way before CDC made an offer to buy shares in CEC in 2018. That could be the only reason they refused, causing that transaction to fall through.
PF is in the process of nationalising CEC, but they are using words like common carrier. They have nationalised Horizon School, but they used the words compulsory acquisition. They have nationalised Konkola Copper Mines, but they used the words provisional liquidation. These people are nationalising private assets right in front of the public’s eye and they are getting away with it. This is unacceptable! Government can’t just wake up to grab a company’s assets and declare them open for public usage.
What this means is that under this government, you can wake up one morning and find your car has been declared free for public use. This is worse than dictatorship, it didn’t happen even in Gaddafi’s Libya. With this action, the PF has now threatened the very existence of human rights and human life, let alone the security of owning and investing in property.
This is very bad for the economy. The arbitrary takeover of CEC’s power infrastructure by government will no doubt worsen the already existing apprehension that credible investors have about doing business in Zambia. This is especially bad because the energy sector is one area that should be attracting investment instead of scaring away investors.
And Zambians should not be deceived into thinking that this is an isolated incident that only affects the Copperbelt Energy Corporation. If the PF can do this to CEC, they can do it to any other company. If they can do this to any company, they can do this to any individual. In principle, they can take away human rights and human life as they wish. The abrogation of property rights that the government has committed on CEC is so grave and has far-reaching economic consequences.
Now, the law is clear about the arbitrary takeover of private property. Where the government decides that a particular asset must be surrendered to the State, there must be adequate compensation. This is enshrined in the Republican Constitution. You cannot have a group of people, with vested interest for that matter, sit in a room and make such arbitrary decisions.
The PF said they didn’t want to see loss of employment at CEC following the expiry of the Bulk Power Supply Agreement with Zesco. They constituted a team headed by Margaret Mwanakatwe to help CEC remain viable for the protection of jobs. That’s what Secretary General Davies Mwila said in February. Is this the help they were talking about? How does grabbing CEC infrastructure help this private company? CEC power transmission lines have been declared public now, their liberty to dictate the price for any company that wants to use their infrastructure has been stripped away and given to the Energy Regulation Board. So, if the Energy Regulation Board dictates terms that are unfavourable to CEC and all the mines switch to Zesco, what will remain of CEC? This is surely the most painful help that one can ever get.
But there is something else that we see in all this. What we see here is government trying to reboot Zesco. As things stand, Zesco is so broke that they will not play a significant role in the upcoming elections, as they always do. They won’t manage to fund the ruling party, to provide transport to the cadres for campaign rallies and to ferry voters to polling stations. Government desperately wants to resuscitate Zesco so that they can continue providing financial support to the party in power, but it is incapable. The tariff increase has failed to stabilise their operations, but now they have found a new financial boost from the mines by taking over CEC customers.
The argument from government is simply that power transmission lines are such strategic infrastructure that you cannot have every investor in the sector building their own power lines. They give an example that it is not possible for everyone who owns a plane to have their own airport. But how many farmers in Mkushi have their own airstrips? Can government go and grab that land and turn that facility into a public asset without compensation?
This band-aid solution to the KCM and Zesco problem is unsustainable. Zesco is already struggling to satisfy the needs of its current customer base, so how will they manage to survive with a non-paying KCM? And this KCM has been the biggest consumer of CEC’s energy and will continue to be Zesco’s biggest consumer, which should follow that they will be Zesco’s biggest debtor, unless they have been offered a give-away tariff simply to undercut CEC.