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ZESCO NEEDS TARIFFS INCREASE TO STAY AFLOAT – CHIKWANDA

By KALOBWE BWALYA

ZESCO must be allowed to increase electricity tariffs so that the company can be profitable and be saved from collapse, energy expert Johnson Chikwanda has said. Mr Chikwanda also emphasised the need for Zesco to re-negotiate tariff with Independent Power Producers (IPPs) with a view of reducing costs on power purchases.

 He said reducing overhead and administrative costs at Zesco would make the company more relevant to the country. “Zesco will be more relevant when it becomes profitable. The company should be allowed to increase tariffs,” said Mr Chikwanda. Mr Chikwanda has since welcomed Government’s assurance that the remaining 450 mega watt units at Kafue Gorge Lower will be commissioned by the end of the year. He said this was commendable as it would enhance Zesco’s ability to export significant amount of electricity in the region.

Mr Chikwanda has since called for expansion of the current different customer bands which attract different tariffs. He pointed out that without reforms at Zesco it will be very difficult to pay the staggering $3.5 billion which the company owes. “There is need to fine tune and reset more tariffs and apply new tariffs across these expanded segments without making worse the poor hospitals. The cost of service study must be handled with more caution,” said Mr Chikwanda.

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Meanwhile, Mr Chikwanda said financial and structural reforms at Zesco must commence, statring that President Hakainde Hichilema assured the nation that the reforms will be implemented. He said Zesco is over staffed for the size of power it is producing as the megawatt per manpower ratio is not optimal.

Mr Chikwanda has appealed to stakeholders to support the intended reforms at Zesco which will improve the financial viability of the utility firm and improve efficiency.

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