Maravi

Mpombo washes his hands...I stopped CEC sale

Mpombo washes his hands...I stopped CEC sale
By Amos Malupenga
Saturday September 22, 2007 [04:00]

Former energy minister George Mpombo yesterday said he stopped the negotiations for Cinergy Corporation to sell their shares in CEC because the government did not agree with certain issues. And Zesco Limited managing director Rhodnie Sisala has said that although he is a shareholder in the Copperbelt Energy Corporation (CEC), he does not participate in its management.

Reacting to The Post challenge for him to tell the nation what he knew about the sale of 77 per cent shares in CEC to a consortium of Zambians, Mpombo – who is now defence minister - said he tried as much as possible to protect the interest of Zambians at the time he dealt with the matter in his capacity as energy minister in 2005.

“And all I can tell you is that by the time I left the ministry, we had called off discussions with Cinergy because we could not agree on certain issues,” Mpombo said. “This was after a high-powered meeting we had with officials from CEC and other investors. I personally instructed the then permanent secretary, the late Mr Geoffrey Mukala, to write to Cinergy to explain that negotiations had been called off because I was mindful of the government position on this matter. I don’t know what happened on this issue after I left Cabinet.”

And Sisala said it was not a secret that he held 0.6 per cent of shares in CEC.

“But I don’t sit on the board neither do I participate in the management of CEC,” he said. “So I don’t influence anything.”

Sisala said the three percent shares were offered to senior managers in the Power Division of ZCCM during the privatisation of the mines in 1997. He said the senior managers included himself, Humphrey Mulela, Aaron Botha, Hanson Sindowe and Charles Milupi.

“They sold us the same shares so we could assist the new buyers of the company in running it,” Sisala said.

He said it was incorrect for people to even associate him with the Zesco/CEC bulk power purchase contract which enables CEC to purchase Zesco power at heavily subsidised rates for onward transmition to the mines at huge profits.

“Those contracts were signed in 1997,” Sisala said. “I was not in Zesco at the time. Those agreements were between ZCCM and Zesco before CEC bought that.”

And commenting on rumours that he was being shielded by President Mwanawasa in his position because he holds shares in CEC on his behalf, Sisala said the rumours were malicious.

“I bought those shares long before President Mwanawasa went to State House. And I didn’t buy these shares as an individual, we bought as a group,” Sisala said. “So how do these shares become shares for the first family? That’s not correct. People are just being malicious.”

And sources at the Energy Regulations Board (ERB) revealed yesterday that Cinergy decided to pull out of CEC after a contract to build a 250 kv power line from Kitwe to Kansanshi Mine is Solwezi was given to Zesco.

“CEC had lobbied heavily to be awarded this contract,” the source said. “But as ERB, we went round the country collecting people’s views on this matter. And clearly, many people felt that Zesco, a local company needed to be supported and was given the contract especially that they had capacity to do that. This hurt Cinergy and they decided to pull out by way of offloading their major shares in CEC.”

And a former CEC employee yesterday praised Sisala as a patriot who protected local companies and employees.

“Many people might not know this but Mr Sisala recommended to government that CEC was a very viable and profitable institution which did not require to be sold,” the source said. “His friends were annoyed at this recommendation and they did all sorts of things to undermine him.

Finally, those whites came in and indeed Mr Sisala was vindicated because they declared dividends within a very short period of time.

But these new owners harassed employees through unnecessary retrenchments. Mr Sisala still argued that CEC was a viable company which did not need to retrench employees. Some of us even sued CEC when they did not give us our dues.”

Labels: CEC, GEORGE MPOMBO, RODNEY SISALA, THE POST, ZESCO

posted by MrK @ 4:55 AM