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Zimbabwe Power Utility Refuses to Slash New Tariffs, Angers Consumers

Zimbabwe Electricity Supply Authority Chief Executive Josh Chifamba told the Daily News paper that rolling back rate increases introduced last week would create serious financial and operational problems

The Zimbabwe Electricity Supply Authority has said that it will not give in to demands by consumer advocates that it roll back the 31 percent tariff increases introduced four days ago, arguing that its operations have been hobbled by charging sub-economic rates.

ZESA Chief Executive Josh Chifamba told the Daily News paper that easing the new tariffs would lead to serious financial and operational problems. ZESA increased its basic rate for power from 7.53 to 9.83 cents per kilowatt hour last week.

Chifamba said consumers owe the utility more than US$450 million, obliging it to halt a number of projects. He said the only way to ensure ZESA’s viability is to raise tariffs.

But economist John Robertson said he believes ZESA will keep running at a loss even with the higher tariffs because the utility is poorly managed.

Robertson said ZESA should seek financing to boost power production and generate more income rather than trying to reduce losses by raising rates.

Residents of Harare and Bulawayo last week warned of mass protests if ZESA does not reduce the power tariffs. Bulawayo Progressive Residents Association Director Roderick Fayayo said the parastatal will be forced by Zimbabweans to trim its tariffs.

Chifamba told the state-controlled Herald newspaper that 40 potential investors have put in bids for a stake in ZESA Holdings under its commercialization program.

Chifamba said power utility requires US$3 billion in new investment to boost power production at its Kariba hydro-electric and Hwange coal-fired power stations.

The World Bank recently said Zimbabwe would need to invest some US$13 billion to overhaul its battered electric power sector.

40 potential investors have submitted bids for a stake in Zesa Holdings amid revelations the power utility requires US$3 billion to raise generation capacity at Hwange thermal and Kariba South hydropower plants