Friday, September 14, 2007

Probe Sisala, Zesco, CEC deals

Probe Sisala, Zesco, CEC deals
By Editor
Friday September 14, 2007 [04:00]

It is dishonest for Zesco managing director Rhodnie Sisala to pretend he is sympathetic to the Zambian people who are subsidising the power that is being supplied to the mines when he is personally a beneficiary of the rip-off. It is scandalous for Sisala to be a shareholder of Copperbelt Energy Cooperation (CEC) and at the same time be the managing director of Zesco.

CEC totally depends on Zesco for survival. It has negotiated what may be said to be unacceptable deals with Zesco to supply it power at ridiculously low rates for onward transmission to the mines at gigantic profits. CEC is making these huge profits that are supposed to end up in the pockets of Sisala and his friends at the expense of Zesco and other general consumers of power.

In short, what this means is that Sisala is in a position to use Zesco to supply his company CEC power at low rates which he and his friends later sell to the mines at super profits. Is this right? Is this acceptable conduct? Would it be wrong to look at this as a case of corruption?

Clearly, Sisala, as managing director of Zesco, is not in a position to represent public interest efficiently or fairly in his dealings with CEC. He is in a compromised position; there cannot be arms-length transactions in situations of this nature. Even though Sisala claims he is not participating in the management of CEC, he is still in a position to pass on to his colleagues information that will be favourable to their company at the expense of Zesco.

It is now understandable why Sisala who was in a position to get CEC back to Zesco failed to do so. Sisala was in a good position to stop the sale of CEC to his friends and allow it to be taken over by Zesco. We also wonder how many people at the Ministry of Energy are participants in the CEC deal. George Mpombo and Felix Mutati who happened to be ministers of energy at the material time need to explain to the nation what happened, why it happened and if also, like Sisala, they are shareholders in CEC.

It is immoral for citizens of this country to rip off the Zambian electricity consumers in this manner. CEC is not involved in any generation of power. It is simply a retailer of Zesco’s electricity. Does Zesco really need a retailer of its electricity to the mines at such a gigantic discount?

No wonder Zesco is failing to meet its obligations in terms of increasing the capacity of power generation because almost all the money made from mining companies is going to the shareholders of CEC.

Sisala is telling the nation that increased copper production by the mines is putting a lot of pressure on electricity generation by Zesco. But he is not telling the nation that Zesco is not benefiting much from this increased consumption by the mines because most of the money is going to CEC, the benefits are being shared by CEC and the mining companies. And if Zesco cannot make enough money from the biggest consumers of electricity like the mines, where does Sisala expect Zesco to get the money needed for increasing power generation?

Sisala and his friends are not helping Zesco at all, they are just ripping it off - CEC is plundering Zesco. If they are serious businessmen, let them look for money and invest in new power generation ventures. Moreover, Sisala’s friends have not spent any money of their own to buy CEC. What they have done is to borrow money from abroad and pay off the previous shareholders of CEC - and make CEC pay this debt. Effectively, they didn’t borrow the money. CEC borrowed the money for the purchase of its own shares.

They have literally put in nothing themselves; they have taken no risk at all, that’s if there’s any risk to take in a deal of this nature. Effectively, the people paying for the shares of Sisala’s friends in CEC are the ordinary Zambian consumers through the high tariffs they have to endure to keep Zesco running and to enable it to continue supplying CEC with power. In this way Sisala and his friends are making gigantic profits. This is not the way to do business.

We hope the Zambian government can learn something from the Russian experience and why President Vladimir Putin had to lock up some so-called businessmen who had made fortunes from deals of this nature.

There is need for us to realise that public assets like Zesco belong to all our people and all should benefit from them equally or in a fair manner. Public resources should be there for all Zambians to enjoy.

It is clear from this that there is a great danger that government policies, if not combined with clear social concern, will bring socio-economic deprivation.

There is need for us to build our country up through diligence and frugality. A dangerous tendency of personal gain among our public servants doesn’t seem to be dying. It seems to be as stubborn as roaches that have invaded a house. This is very bad because it makes it very difficult for our country to use its very limited resources in a way that fully benefits our people.

But why was it possible for Sisala and his friends to work in this way without anyone realising or noticing that there was something questionable in their dealings? Is the system so rotten that even the rot can’t stink anymore because it has become a normal smell to which all our noses have become accustomed to?

We urge the relevant authorities to carefully probe the CEC deal and its effect on Zesco. We demand this in the interest of justice and fairness. If at the end of the day the situation requires that Caesar gets back what belongs to him, so be it. Deals that are not right, that are not fair should never be allowed to live long.

All Zambians deserve a fair deal from Zesco and from all public resources. Clearly, there is a prima facie case of Sisala abusing his trust as Zesco managing director to enrich himself and his friends.

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At 8:01 PM , Anonymous Nell said...

For once the POST has hit the nail on the head. However i think there is more to this than meets the eye and it's unlikely that the LPM administration will make any moves to remove Sisala. Many others may have benefited from CEC.


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