Maravi

Business consultant urges Zesco to identify stakeholders

Business consultant urges Zesco to identify stakeholders
By Joan Chirwa
Saturday July 14, 2007 [04:00]

A LOCAL business consultant has advised Zesco Limited to identify stakeholders that could help jump-start the utility’s operations for efficient supply of electricity in the country. And Small Holder Enterprise and Marketing Programme (SHEMP) Agribusiness Development Component team leader Gerrit Struyf said the current increase in demand for electricity necessitated by huge investments in mining would affect the agricultural sector if remedial measures are not quickly implemented.

Meanwhile, energy and water development permanent secretary Buleti Nsemukila has said the ministry would engage Zesco Limited to discuss the issue of infrastructure and tariffs raised by the power utility.

Jones Kalyongwe, in an interview, said the current problems in generation and supply of electricity in the country was as a result of inadequate cost-effective analysis of the power utility’s machinery.

“Zesco Limited should seriously look at its internal stakeholders and it should identify the interested stakeholders who can help in the running of the power utility,” Kalyongwe said. “It is important to identify the level of the stakeholders’ contribution and see what impact they can have on the current projects that Zesco Limited is carrying out.”

Zesco Limited managing director Rhodnie Sisala on Wednesday said the current load shedding was not attitude problem but as a result of inadequate investments in infrastructure.

Sisala said an upward adjustment to the current electricity tariffs could help the power utility finance some of its huge projects for efficient and quality supply of electricity in the country.

But Kalyongwe said Zesco Limited should access funding from the government, considering that a substantial amount allocated to line ministries was currently lying idle in commercial banks.

“We have heard the president talk about some Chinese who want to partner with Zesco Limited in electricity generation for the country. We have also heard the managing director of Zesco Limited saying that the utility cannot import power from the Democratic Republic of Congo (DRC) because interconnector had been vandalised. And recently the Secretary to the Treasury indicated that about K700 billion meant for operations of different government ministries is lying idle in commercial banks.

Why can’t Zesco borrow this money?” Kalyongwe asked. “I worked in a factory before and the most important thing is to heavily invest in critical standby equipment which can be used in situations where you have a crisis. The equipment is quite expensive but it is the most important investment that big companies like Zesco Limited can ever make.”

Kalyongwe said investments in infrastructure for power generation should be made if that was the immediate solution to current power deficits the country was experiencing.

“In order to guard the economic life of Zambia, there is need to find a solution to the problem of power shortages by investing heavily in this sector,” Kalyongwe said.

“And I don’t think increasing electricity tariffs will be the best way to generate resources to fund Zesco’s projects. This will just alienate Zesco Limited from its clients. It is all about learning strategic management and planning so that critical planning can be done on how the utility should operate profitably in future.”

And Struyf said the current huge projects in the mining sector posed a serious threat to commercial agriculture since the mines consumed a lot of energy.

“Two smelters will soon be commissioned in Zambia and a lot more investments in the mining sector are happening in this country. I do not know whether the farmers are going to benefit anything from the current generated electricity.

The current situation which farmers have complained about is the load shedding and it has become very difficult to irrigate,” Struyf said. “What is needed is long term planning on the part of Zesco Limited so that most of the key sectors of the economy are supported through the efficient supply of electricity in the country.”

Nsemukila said the government was aware of numerous problems being faced by Zesco Limited and that his ministry would soon engage the power utility to critically discuss its challenges.

“As you are aware, the Minister of Energy has dissolved the Zesco and Energy Regulation Board (ERB) boards,” Nsemukila said. “On the issues that Zesco is raising, government is aware of these issues. It will be appropriate that the ministry engages them over issues raised such as the problem of infrastructure and tariffs. Zesco has been doing some rehabilitations of its plants and that is on-going. Otherwise, we will start hold meetings with them (Zesco) and we will issue a press statement after that.”

Zesco currently generates around 1,200 mega watts of electricity against a peak demand of over 1,400 mega watts, meaning the power utility has to either import the deficit of about 250 mega watts or carry out load shedding in order to stabilise the system.

Rehabilitation works and up-rating of Zesco’s major equipment is being undertaken, with hopes of increasing installed capacity from the current 1,670 mega watts to close to 2,000 mega watts at the end of the project.

Labels: MANAGEMENT, ZESCO

posted by MrK @ 4:53 AM