President Lungu approves ZESCO’s tarrif proposals


February 9, 2015,

President Edgar Lungu has approved proposals by ZESCO Limited to freeze domestic consumer tariffs for the next 24 months and to adjust commercial consumer tariffs to make them cost-reflective.


Special Assistant to the President for Press and Public Relations Amos Chanda said in a statement released to ZANIS this evening that President Lungu has directed ZESCO Limited Managing Director Cyprian Chitundu to proceed quickly to implement the proposals because the suggestions were pro-poor.


And President Lungu announced that he will soon make structural changes to some ministries starting with the splitting of the energy and mining portfolios currently combined under the Ministry of Mines, Energy and Water Development.


The President will also split the Ministry of Communications and Transport, Works and Supply into two to improve operational efficiency.


Mr Lungu assured Mr. Chitundu that the problems he complained about regarding conflicts of interest over the placement of energy and mines administration in the same ministry would soon be over once the ministry is divided into two.


In his special presentation to the President on the performance of the power utility, Mr Chitundu requested the Head of State to facilitate the enactment of laws that would help ZESCO enhance its operations.


The President said he was prepared to ask Parliament to enact laws aimed at improving operations of strategic firms such as ZESCO.


The President advised ZESCO to work with the Rural Electrification Authority to electrify 16,000 houses under an on-going project to light up village homes.


Mr. Chitundu appealed to the President to allow the company enforce commercial agreements and enable it recover US$110 million that KCM owes the power utility.


He said KCM was adamant to pay the outstanding electricity bills.


“The company’s revenue base had been affected due to failure by some mining companies to settle their bills. Some development agreements that were meant to attract foreign investments were against the commercial interests of ZESCO. The situation where mining firms pay low electricity tariffs at the expense of domestic consumers is one such example because it affects the financial viability of the company. Your Excellency, also it is unacceptable that the mines are being subsidized by domestic consumers,” he said.


Mr Chitundu submitted that mining companies should be compelled to purchase their power at a new and current cost but noted that existing bulk supply agreements prevented the power utility from achieving this goal.