ZESCO tariffs too low to sustain any business- Mundende

Tue, 14 Mar 2017 09:41:39 +0000

By MUKOSELA KASALWE

ZESCO tariffs have remained static for a long time and should be allowed to play with the dynamics of economics like any commodity on the market such as fuel or water, says Zesco managing director Victor Mundende.

Mr Mundende said that ZESCO was positioning itself to be a power hub of the region through the exportation of electricity to neighbouring countries and beyond so that it could earn the country much needed foreign exchange.

Speaking in Lusaka on Friday at a press conference for the Association of Power Utilities in Africa, he said although other power generators had come on board such as the independent power producer Maamba Colliers, ZESCO was buying power from it at 10 cents per kilowatt hour which it was selling at six cents per kilowatt hour.

He said that ZESCO had about five categories of customers and that in the mining industry the power utility firm charged an average of six US cents per kilowatt hour while Chile, which he said produced 5 million tonnes of copper per annum, was charging 15 US cents per kilowatt hour and Peru US 9. 6 cents per kilowatt hour, saying what Zesco was charging was too low to sustain any business.

Mr Mundende said that he was of the view that electricity needed to be allowed to ‘‘play with the dynamics of economics’’ just like any commodity such as fuel or water and that whenever there was a change in price it needed to follow suit.

He explained that if was to go commercial or industrial in any given business where a trade used transport costs, it would not make business sense to maintain the same price.

“What we are saying is that you go into commercial or industrial of any business, just a few months ago fuel was increased surely you have to change your books. So what we are saying is that this commodity should be allowed to play with the dynamics of economics like any other commodity be it fuel or water or any material you are using for your business,” he said.

Mr Mundende said it was customers’ perception that Zambia’s electricity was expensive but stated that compared with other power utility firms in the region it actually had the lowest tariffs.