Saturday, July 19, 2008

Sichinga calls for Zesco restructuring

Sichinga calls for Zesco restructuring
By Chiwoyu Sinyangwe
Saturday July 19, 2008 [04:00]

ZESCO Limited will still fail to meet the energy challenge in the country even when it raises tariffs as long as it is not restructured, Lusaka business consultant Bob Sichinga has observed. And Sichinga said it will be difficult to attract meaningful participation of the private sector in the energy generation sector if Zesco continues to control the transmission facility. In an interview, Sichinga who is also managing director of Innovative Consulting, also called for the limitation of the participation of Zesco in the development of future electricity generation facilities.

"People are not opposed to the increase of tariffs but the question everyone is asking is... 'Is Zesco going to be more efficient if the tariffs are raised?'" Sichinga asked. "The answer is 'no'. Right now Zesco is not an efficient company in that in most of the power that it generates, very little reaches the final consumers, the end users."

And Sichinga also said it would be difficult to attract private participation in the electricity generation projects if Zesco continued to monopolise the transmission facilities.

"There is need to dismember Zesco. You want invite private sectors like Lunsemfwa and other private individuals to come in the market yet you want Zesco to monopolise the power distribution facility. How is that possible," Sichinga asked. "There is need to have an independent carrier in place to specifically handle transmission. Let Zesco do their core business which is generation."

Sichinga further called for limiting of Zesco's participation in the future generation facilities.

"Government policy is to allow private sector investment in the energy sector. The mines have shown willingness to invest in power generation facilities, why not support such ideas?" asked Sichinga. "Zesco's current balance sheet makes it impossible for any financial institution to lend them money.

Now government is doing that for them...contrary to its own policies. And it has taken Zesco five years to complete the mere rehabilitation works, how long would take them to put up a new power plant? These are the questions our policy makers should be asking themselves."

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