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Zimbabwe Companies Say State Electric Utility Using Coercive Rate Tactics

The Confederation of Zimbabwe Industries is reported to have threatened to take the Zimbabwe Electricity Power Authority to court for pressuring firms to pay a rate nearly double the current one to avoid 14-hour blackouts

Some Zimbabwean industries are complaining that the much-maligned Zimbabwe Electricity Supply Authority is obliging them to pay a significantly higher rate of 13 cents a kilowatt hour or face blackouts of four to 14 hours a day.

The state-controlled Herald newspaper reported that businesses are unhappy with the move to boost power costs for firms now paying 7 cents a kilowatt hour.

The paper said the Confederation of Zimbabwe Industries is threatening to take ZESA to court alleging coercive billing practices by the utility. Consumers and businesses are already unhappy about across-the-board rate hikes taking effect Thursday.

Zimbabwe National Chamber of Commerce President Trust Chikohora said most firms will raise prices if ZESA obliges them to pay the special rate for steady service.

ZESA spokesman Fullard Gwasira said the special rate is intended to save power and boost production in various industrial sectors.

"Companies are not being forced to pay the higher tariffs but we recommend that they do so in order to have access to uninterrupted power," Gwasira said.

Harare Residents Trust Chairman Precious Shumba said his organization resolved Monday that residents of the Zimbabwean capital should not pay the new household rate of 9.53 cents a kilowatt hour. But Women of Zimbabwe Arise Co-Director Jenni Williams said her organization had a fruitful meeting Monday with ZESA officials.

The World Bank meanwhile says Zimbabwe needs some US$13 billion– double its gross domestic product – to overhaul its dilapidated power generation system. But Energy Minister Elton Mangoma said that in the short run Zimbabwe might do with less.

World Bank Country Director Kundhavi Kadiresan said a lack of clarity on indigenization or black economic empowerment process was discouraging investment in an economy that was nonetheless showing impressive growth.