MOPANI SHAMBLES

Wed, 30 Aug 2017 09:47:09 +0000

BY approaching the High Court, Glencore the owners of Mopani, have claimed the moral high ground in the electricity standoff with the Copperbelt Energy Corporation.  Mopani has adhered to a morally defensible course of action on the basis of an existing agreement.

However flawed, annoying or even repugnant their actions have been, they cannot be faulted for following the law which cannot be said of CEC, which switched off power, or restricted it without exhausting dispute procedures embedded within the Power Purchase Agreement.

There is no doubt that CEC has been out manoeuvred legally by Mopani who are using the law to fight their case unlike the suppliers who are counting on public indignation and political clout to resolve the impasse.  They have chosen to politicise the issue.

We are heartened that the Energy Regulation Board will summon CEC in accordance with Electricity Act Chapter 433 of the Laws of Zambia which in Article 9 states quite clearly that, “Except for causes beyond the control of the operator …… no operator shall lessen or discontinue the supply of electricity stipulated in any contract of supply …..”

Further, the Acts states in Article 10 (1) that, “If any operator of an undertaking willfully or without reasonable cause lessens or discontinues the supply of electricity stipulated in any contract of supply, or if a person operates an undertaking in such a manner as is, in the opinion of the Board, detrimental to the public interest, the Board may, after affording the operator an opportunity to be heard on the matter, suspend the licence and authorise any person appointed by the Board to enter upon the undertaking and forthwith to take ‘all such action as that person may consider necessary for the maintenance and continuation of the supply of electricity from the undertaking.’’

We are now in day 14 in which power has been restricted to Mopani on account of a tariff dispute, an occurrence that is very well described in the Electricity Act and the Act provides the process by which any increase can be effected and the manner in which those affected are entitled to dispute an increase and seek settlement.  There is no doubt Mopani is using this law in applying for the criminal prosecution of  Directors of CEC on account of contempt of court for disobeying a court order against the restriction of power by CEC.

It is an act of national betrayal that at the time when copper prices are nearing US$7,000 per ton we should be restricting production because of a difference or dispute over electricity tariffs which difference can be resolved on a round table and failure to agree at such a meeting could afford the government an opportunity to explore other means of enforcing public policy.

The truth is that CEC/ZESCO supported by cogent public policy had a far better argument to advance in court against Mopani if it had insisted to pay on the basis of new tariffs.  They could have cited Government decision to remove subsidies and indeed recent International Monetary Fund statements regarding the need for fiscal and monetary prudence if Zambia was to conclude the $1.6 billion agreement intended to stabilise the economy.

Among the requirements by the IMF was the need to remove subsidies from energy generation and the introduction of cost recovery tariffs.

This IMF facility is a growth enabler that will see Zambia’s economic growth accelerate to more than 3.5 percent compared to the contraction it suffered in the early 1990s.

One of the major challenges that Government has always faced in resource mobilisation has been the acute resource gap created mainly by the limited revenue sources and predominance of mining.

It is very important that when we argue contractual matters, emotions should be set aside and only facts and reality must be taken account of.