Foreign-owned mines not affected by load shedding
By Chiwoyu Sinyangwe
Fri 17 Feb. 2012, 12:00 CAT
FOREIGN mining firms on the Copperbelt Energy Corporation power supply line remain unaffected by increased load shedding that has rocked the country since last Tuesday. Last Monday, Zesco Limited warned of increased load shedding in the next two weeks as a result of the shutdown of a key generating machine at Kariba North Bank Hydropower Station.
Director for corporate affairs and business development Bestty Phiri said Zesco had forecast that local power demand of 1,600 megawatts would be outstripped as during the period of the shutdown, only 1,474 megawatts would be available.
"During the machine outage, 165 megawatts will not be available on the national grid thereby resulting in a power deficit during that period. The deficit will necessitate load shedding in order to balance the available generation capacity with demand," said Phiri.
But CEC managing director for operations Neil Croucher said foreign mining firms on the Copperbelt remained immune from the current increased load shedding which has hit mostly, domestic, small-scale and other industrial consumers.
"We have not had any specific requests so far this week. We had a request last week which we acted upon when Zesco has a problem at the power station," said Croucher in an interview.
"Not at this stage have we been requested to cut back on power uptake from Zesco but we are prepared for that should it come through."
Labels: CEC, ENERGY, HYDRO POWER, LOAD SHEDDING, MINING
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CEC ties decline in profits to projects
By Ndinawe Simpelwe
Fri 09 Sep. 2011, 15:20 CAT
COPPERBELT Energy Corporation has attributed the slight decline in its profit before tax to
the number of projects it is undertaking and the effects of the 2008 global economic recession. In an interview, CEC chief executive officer Neil Croucher said the load at the company was picking up slowly after the challenges of the global recession in 2008.
CEC's profit before interest and tax for the first six months of this year decreased by one per cent to US $11.135 million, according to the summary consolidated un-audited results for the period ended June 30, 2011.
Croucher said CEC was expected to increase its power production and sales once it fully recovered from the effects of the global economic recession.
"We are still coming out of the global recession which had affected the company. But slowly we are managing and very soon we will be back after we recover and when we complete most of the projects we are developing," Croucher said.
He said there were a lot of mining projects being developed that would increase the load demand by mining firms once they come on stream.
Croucher said the company was incurring expenses in the numerous projects it was involved in with the mines.
"There are numerous projects that we are undertaking with the mines and they will only start consuming power once they are completed. We expect the load to pick up in the next two years," Croucher said.
The CEC is carrying out projects at Muliashi, Luanshya Copper Mines, Konkola North mine, among others.
"And the government has allowed us to do feasibility studies to develop hydro power in Luapula River," said Croucher.
"If we manage to do that, it means the power will feed into the national grid but because of its proximity, Luapula will also be supplied."
Labels: CEC, NEIL CROUCHER
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CEC signs land agreement with N/West chiefs
By David Chongo in Solwezi
Sun 26 Dec. 2010, 04:00 CAT
COPPERBELT Energy Corporation (CEC) and two chiefs in North Western Province have signed an agreement for the release of
15, 000 hectares of land toward the construction of the
Kabompo Hydro-power station beginning in 2011.
The agreement which was due on Tuesday between CEC and senior chief Musele of Solwezi and senior chief Sailunga in Mwinilunga was finally appended to on Wednesday after delays following some concerns raised by the traditional leaders.
And North Western Province permanent secretary Daniel Bowasi said the region was poised for unprecedented development following the proposed investment in power generation.
Bowasi said energy was extremely important to the region as high-energy demanding industries set up in the area.
“Energy is extremely important to our mines and is extremely important to the development of the entire province. This investment must benefit the people in which they operate. Kabompo will not be like the power projects in Southern Province where it passes the local people,” he said.
Bowasi said the government was putting emphasis on the generation of power in the region as it had great potential to alleviate the pressure on the existing power stations.
The project that would displace about 29 families around Kabompo Gorge and would cost $120 million is expected to generate 40-megawatt of electricity when it’s finally completed by 2015.
Labels: CEC, CHIEF MUSELE, CHIEF SAILUNGA, DANIEL BOWASI, ENERGY, NORTHWESTERN PROVINCE
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‘Procurement officers should be wary of temptations’
By Darious Kapembwa in Kitwe
Sun 28 Nov. 2010, 04:00 CAT
COPPERBELT Energy Corporation managing director -operations Neil Croucher says procurement officers should be wary of temptations that have damaged the image of their profession.
Speaking in Kitwe last Friday, during the ‘Meet the buyer’ dinner dance organised by the Zambia Institute of Purchasing and Supply Copperbelt Chapter at Hotel Edinburgh, Croucher said it was unfortunate that purchasing and supply was greatly exposed to corruption and fraud.
He said the mechanisms that were put in place to protect against fraud and corruption needed to be carefully considered otherwise they have the potential to lead to cumbersome and slow processes leading to the loss of confidence from internal customers and bypassing of the system.
And Mining Suppliers and Contractors Association president Fanwell Banda has said there is need to develop systems that are above individuals in public procurement.
Banda said procurement was a critical factor in developing small and medium scale businesses, hence the need to create systems that would protect the integrity of the profession.
He noted that many organisations had lost huge amounts of money due to corruption in procurement processes and that such corruption is rampant in both government and private institutions.
Banda said there was need to promote ethical business standards. He said investors coming into the country should develop the confidence that Zambians run clean business devoid of corruption.
Labels: CEC, CORRUPTION, FANWELL BANDA, NEIL CROUCHER
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Mining companies scale down power consumption as Zesco turn off two generators
Mining companies scale down power consumption as Zesco turn off two generators
By Chiwoyu Sinyangwe
Mon 16 Aug. 2010, 04:01
MINING companies over the weekend scaled down power consumption in non-essential loads to maintain normal production after Zesco shut down two generators at Kafue Gorge Power Station.
Copperbelt Energy Corporation (CEC), the major supplier of power to the vast copper mines, said production at all mines remained stable despite the disruption in national power supply. Zesco over the weekend shut down two generators at Kafue Gorge power station to facilitate for maintenance works on generators number one and two.
The shutdown resulted in 330 mega watts knocked out of the national grid.
In an interview, CEC managing director Neil Croucher said mining companies maintained output despite the outage.
“We asked them (mining companies) to cut back on non-essential loads so that hopefully it doesn’t affect production,” said Croucher.
“And so far, production at the mines is normal.”
Zesco senior manager for marketing and public relations Lucy Zimba yesterday said the country had not experienced massive load shedding as most customers adhered to the company’s earlier statement that as many electrical appliances as possible be switched off, particularly during peak hours.
Zesco had shut down of two generators at Kafue Gorge power station from Saturday, August 14 at 21:00 hours to yesterday at 21:00 hours. Kafue Gorge Hydropower station is the country’s biggest power station recently rehabilitated and up-rated to 990 mega watts from the initial installed capacity of 900 mega watts.
Labels: CEC, LUCY ZIMBA, MINING, ZESCO
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ERB urges media to scrutnise Zesco
By Justin Katilungu in Kabwe
Thu 15 Apr. 2010, 04:20 CAT
THE media should take interest in the performance of Zesco in relation to its key performance indicator scores monitored by the Energy Regulation Board (ERB), acting executive director Mushimba Nyamazana has said.
Officiating at a one day-media workshop in Kabwe yesterday, Dr Nyamazana noted that it was only through such media scrutiny that the public would be fully informed about the performance of Zesco to enable Zambians make an informed judgement as to whether the migration towards cost reflective tariffs and its implied additional resources collected by the utility were being put to good use.
“These key performance indicators are intended at monitoring and accessing Zesco performance in areas of public interest specifically metering, cash management, staff productivity, quality of services supply and system losses,” Dr Nyamazana stressed.
He noted that energy sector was the blood of the economy and as such it was important that the media help the public by holding key institution in the sector accountable.
“The media has crucial role to ensuring that the performance of Zesco is disseminated to consumers nation wide as publicised by the ERB on a quarterly basis. There are also several developments in the energy sector which the media should high light to the public,” he said.
Dr Nyamazana said there was need to exploit the vast potential of the energy sector which was currently estimated at 6000 mega watts by allowing more operators to come on board in electricity provision in Zambia.
He was happy with the developments being undertaken to develop the sector in the wake of the 2008 power blackouts Zambia faced.
Dr Nyamazana pointed out the establishment of the Itezhi Tezhi power station special purpose vehicle meant to implement the project on a joint venture basis between Zesco and Tata of India and the completion of the power rehabilitation project at Kafue George Power Station that increased its generation capacity by 90 mega watts.
Other initiatives included the plans to generate power in Kabompo district by the Copperbelt Energy Corporation (CEC), which had so far reached an advanced stage while the commencement of Kariba North Bank extension project that would increase its capacity to 360 mega watts had been completed.
Labels: CEC, ERB, MUSHIMBA NYAMAZANA, ZESCO
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Zesco, CEC eye Liberian electricity corporation
By Kabanda Chulu in Kitwe
Tue 16 Feb. 2010, 04:01 CAT
ZESCO Limited and Copperbelt Energy Corporation (CEC) have submitted a joint bid that has been pre-qualified to operate the Liberian National Electricity Corporation. And CEC is still interested to participate in developing the Kafue Gorge lower hydro power station.
Announcing the partnership with Zesco last week, CEC managing director Neil Croucher said the two Zambian power utilities have the capability to help restore full electricity supply to the Liberian people.
“Due to the war, infrastructure is run down especially in the electricity sub sector and together with Zesco we hope to sign a management contract to operate the Liberian National Electricity Company and together we believe we have the expertise to efficiently operate that utility and our bid has been pre-qualified to the next stage whose outcome will be announced by March 16,³³ 2010,” Croucher said.
“In the event that we are unsuccessful, we will have demonstrated our ability to work with Zesco as a partner in a high profile international project. This will send a positive message to the international community that Zambian entities are competitive and competent in the management of power systems.”
Recently, a team from CEC completed a consultancy assignment in the Gambia that was aimed at launching the transmission system management thus show-casing the recognition that CEC commands within Africa for its skills in designing and operating transmission system.
On the second line of the interconnector with the Democratic Republic of Congo (DRC), Croucher said two separate tenders had been issued out with one looking at the supply and transmission line while the other would be for the power sub-station.
“We expect completion and commissioning of the project to take place this year or early next year and we have been holding regular meetings with SNEL DR Congo national power utility to find out how they are doing that side,” Croucher said.
“We have also written to government requesting the rights to construct a high voltage transmission line from the Copperbelt into the Luapula Province and we are hoping for a positive response since we believe there is a huge potential across the pedicle road that requires to be serviced.”
He said the future of the Zambian economy lay in investing in the development of existing and new power generation projects.
“We anticipate demand to increase by 40 per cent from our existing and new customers and as economic growth rises, we shall soon get back to power shortages hence the way forward lies in development of brown and greenfield power generation projects,” Croucher said.
“And this is why we are looking forward to develop the Kabompo gorge project and we are still interested in the Kafue Lower project and we submitted bids expressing interest and we are just waiting for the next stage in the process.”
Croucher expressed optimism that 2010 would result in positive business operations.
“The effect of falling copper prices caused a reduction in CEC’s capacity sales to mining customers of 24 per cent from an average of 532 mega watts during 2008 to a low point of 404 mega watts in September 2009. Copper prices are increasing but consumption patterns have not reached the level it was before the global economic recession since current capacity sales are hovering around 430 mega watts,” said Croucher.
“We are hopeful that things will improve especially that we are seeing a recovery, with activity re-commencing at Luanshya Copper Mines and Chambishi Metals and continued investment by Konkola Copper Mines to expand both its mining and smelting capacity.”
Labels: CEC, LIBERIA, ZESCO
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Mwinilunga residents ask Rupiah to deliver on promise
By Zumani Katasefa in Kitwe
Tue 01 Dec. 2009, 04:01 CAT
MWINULUNGA residents have asked President Rupiah Banda's government to honour its promise to have the district connected to the Lumwana Mine power grid.
In a telephone interview yesterday, Mwinilunga district commissioner Webster Samakesa said the residents wanted to know what had happened to the promise the late president Levy Mwanawasa made to them.
"During a community meeting I had with them (residents) they wanted to know what has happened to the promise late president Mwanawasa made to them to, have the district connected to Lumwana. I told them that it is not only Lumwana the district can be connected to. Even Copperbelt Energy (CEC) can solve the problem," he said.
Samakesa said people in the area were concerned about the constant breakdown of the diesel propelled generator leading to blackouts in the district.
"Last week I had a meeting with the residents, they talked about a lot of issues. One of the issues was the procurement of the generator, the current one is obsolete," he said.
Samakesa said because of not having a generator which was not in good condition, the district suffered blackouts from time to time.
"Because of this we cannot effectively carry out our duties, not only us but those in the private sector are also affected," he said.
Samakesa said currently the district only had one generator which was operational while the other broke down and was being worked on.
He said due to non-availability of reliable source of power, many investors were shunning to go and put their investments in Mwinilunga.
Samakesa also said Mwinilunga residents demanded that the government expedite the construction of the hydro-power station in the area.
"But I told them that that project cannot be done on a short term. It is a long-term project and feasibility studies are going on. I asked people to be patient. Unless the issue of the hydro power is done, we are not going to attract investors," he said.
Samakesa said he had been informed that the construction of the hydro-power station may commence next year.
Labels: CEC, RUPIAH BANDA, WEBSTER SAMAKESA
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Mines suspend production
Written by Staff Reporters
Wednesday, June 17, 2009 2:52:35 PM
SOME copper mines on the Copperbelt Province have temporarily suspended production due to inadequate and unreliable supply of electricity that resulted in the national blackout on Monday night following the failure of the Zesco sub station at Leopards Hill in Lusaka.
And Copperbelt Energy Corporation (CEC) executive chairman Hanson Sindowe yesterday said the corporation's 80 mega watts capacity from its diesel generators to supply electricity to the mines was not sufficient to allow production but for emergency operations only.
Sources at both Mopani and Konkola copper mines, the country's biggest mines on the Copperbelt, disclosed that the mines stopped production immediately power supply was disrupted on Monday night.
"To safeguard machinery and equipment we were instructed to stop production around midnight because power was not reliable to continue operations since it was coming on and off and what is on standby through generators cannot support production," the source said.
Both Mopani chief executive Emmanuel Mutati and KCM corporate affairs director Rahul Khakar were reportedly holding meetings with their senior management and could not be reached for comment by press time.
But Chamber of Mines president Nathan Chishimba, who could neither confirm nor deny the shut down of production at some mines, said the national blackout had affected some mines but the extent of damage was not yet known.
He said the lack of reliable and efficient power supply would affect the attainment of the projected copper output of 600,000 metric tonnes for 2009.
"Anything that disrupts power affects the mines heavily and this [Monday] blackout affected some mines but I have not received full details of the extent or damage caused hence I cannot conclusively talk about this matter," Chishimba said. "But power is vital in mine operations and it is one of the major factors that must be constant [regular] if Zambia is to attain the scheduled copper production of 600,000 metric tonnes."
Sindowe said CEC could only provide power for emergency operations and not for mines' production.
"It is unfortunate that this incident has happened and we immediately provided 80 mega watts from our generators and we also imported over 100 mega watts from the DR Congo but this is not sufficient for production but just to allow smooth shut down of machinery and equipment and for ventilation and de-watering purposes," Sindowe said.
And the Energy Regulation Board (ERB) has engaged Zesco to establish the full extent of the causes and effects of the nationwide blackout that occurred on Monday around 20:00 hours.
"Preliminary indicators are that power outages occurred when one of the two 125 mega volt amperes transformers at Leopards Hill sub station caught fire and this is the main submission linking Kafue Gorge and Kariba North Bank Power stations to the rest of the Zambian power system," stated the ERB.
"The challenges faced during the night in restoring electricity supplies to consumers were as a result of low consumers which induced high voltages in the transmission lines and this had the effect of prolonged restoration times faced during the night from the time of the blackout."
Copperbelt University (CBU) students protested against the power blackout on Monday night.
Labels: CEC, COPPERBELT PROVINCE, MOPANI
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CEC embarks on K78bn project with DRC firm
Written by Nchima Nchito Jr
Monday, April 13, 2009 3:58:06 AM
COPPERBELT Energy Corporation (CEC) is embarking on a US $14 million (about K78 billion) joint venture project with Snel, Democratic Republic of Congo (DRC)’s national power utility company.
According to mining weekly, CEC is this year expected to commence the construction of a double-circuit 220-kv inter-connector between Zambia and DRC.
The inter-connector will stretch from Chingola in Zambia, to Karavia near the southern DRC city of Lubumbashi. The project is expected to increase the capacity of the existing inter-connector between the two countries from 260 megawatts to 500 megawatts.
The two countries are also expected to upgrade their current 220-kV regional interconnection to significantly raise the amount of electricity that can be transmitted from the DRC to other Southern African countries.
On the DRC side, Snel and the World Bank are the financiers of the project, while CEC is moving to secure debt financing from a commercial bank to fund the Zambian aspects of the project.
CEC supplies power to Konkola Copper Mines, Zambia’s largest copper producer, Mopani Copper Mines and the recently-closed Luanshya Copper Mines. The other mining houses it supplies power to are Chambishi Copper Mines, Chibuluma Copper Mines and the NFC Africa Mining.
Labels: CEC, DRC, ENERGY
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Zambia to experience more load shedding, says Sisala
By Chiwoyu Sinyangwe
Sunday May 11, 2008 [04:01]
ZAMBIA’S inter-connector with the Democratic Republic of Congo (DRC) has been cut resulting in increased load shedding in the country, Zesco managing director Rhodnie Sisala has confirmed. And a source said efforts by Zesco to expedite the restoration of power supply on the 120 megawatts line has proved difficult because authorities in DRC have been averse.
Meanwhile, Copperbelt Energy Corporation (CEC) said the disconnection of the Zambia-DRC inter-connector has only negatively affected domestic consumers as mining companies were adequately being energised under the bulk supply arrangement.
Currently, the DRC inter-connector is Zambia’s sole source of imported electricity after the country disconnected from the regional power pool following system disturbances early this year which resulted in three national blackouts.
“I can confirm that our inter-connector with DRC was vandalised last Friday (May 2) and the vandalism occurred on the Congo side,” Sisala said. “This means that the 120 megawatts that we import from DRC has not been available in the last 10 days and that has caused further load shedding in the country. But we are hopeful that our colleagues from Congo will restore this service soon.”
And a source said Zesco’s repeated efforts to work with their counterparts in DRC to restore power were proving difficult.
“The problem emanated from the DRC side after the tower was damaged. The vandals stole the conductors from the transmission line. So, currently our imports from DRC which fluctuate between 100 to 120 megawatts are out,” said the source.
“But the biggest problem is that Snel has not moved with haste despite repeated pleas from here (Zesco). Even during the Southern Power meeting, Zesco management approached them over the matter and they assured us that the line would be restored by last Wednesday but up to now nothing is happening…you know these war-torn countries, we can only push them to a certain extent.”
Meanwhile, CEC investor relations manager Clara Musama who also confirmed the development said the disturbance had only negatively affected domestic consumers.
“The line has been having problems but that is not affecting the mining companies as they are adequately covered under the bulk supply arrangement that we have with Zesco,” said Musama.
“Although the transmission line from DRC belongs to us, it is basically used by Zesco to supply to mostly domestic and other consumers.”
The SAPP inter-connectors were disconnected last February to allow regional utilities, particularly Zesa, Eskom of South Africa and Kariba North Station in Zambia to easily trace faults that were causing disturbances on the grid.
Labels: CEC, RHODNIE SISALA, ZESCO
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CEC to disburse K140bn equitably, says Lintini
By Jack Zimba
Wednesday May 07, 2008 [04:00]
THE Citizenship Empowerment Commission (CEC) has assured equitable disbursement of the K140 billion allocated to it by Parliament in this year’s budget. Appearing before the committee on economic affairs and labour, interim director general, Gideon Lintini, said the commission had embarked on sensitisation programmes to educate people on how to access the funds. He said the commission would also translate its act into seven local languages and Braille to ensure that no one was left out.
But chairperson of the committee, Given Lubinda, said it was wishful thinking for the commission to say that it would distribute the funds equitably when it had not defined equity in its plan.
Lubinda said as long as the fund was not segmented for distribution to various groups of society, such as women and the youth, equity would not be possible. He said the commission would not attain equity if it operated as a high street bank.
“Are you segmenting these funds to ensure that women have their own competition? If that is not there, then this equity we are talking about is nothing but wishful thinking,” Lubinda said.
But Lintini said the commission was only mandated to implement the programme.
“We got the marching orders from you the parliamentarians, so if this is wishful thinking then it originated from you,” he said.
Lukulu West member of parliament Charles Kakoma wondered why the commission did not have guidelines on its operations months after its establishment.
Lintini explained that the commission was only set up in 2007 and its director was yet to take up office.
He assured the committee that the guidelines would be put in place after the director assumes office on May 12.
However, Lubinda wondered whether the commission needed more time to implement its programme.
“My concern is that we gave you (K140 billion) as parliament, but there are these issues to be put in place. Are we forcing you to swallow this bone even before you develop teeth to chew?” he asked.
Lintini said: “It would have been desirable if we had more time.”
President Levy Mwanawasa on Labour Day gave a directive for the commission to speed up its implementation work.
Lintini said the commission did not have the “luxury of time” and that it would abide by the presidential directive.
He said the commission expected its first initiative to be implemented in June this year.
Labels: CEC, FUNDING
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CEC to disburse K140bn equitably, says Lintini
By Jack Zimba
Wednesday May 07, 2008 [04:00]
THE Citizenship Empowerment Commission (CEC) has assured equitable disbursement of the K140 billion allocated to it by Parliament in this year’s budget. Appearing before the committee on economic affairs and labour, interim director general, Gideon Lintini, said the commission had embarked on sensitisation programmes to educate people on how to access the funds. He said the commission would also translate its act into seven local languages and Braille to ensure that no one was left out.
But chairperson of the committee, Given Lubinda, said it was wishful thinking for the commission to say that it would distribute the funds equitably when it had not defined equity in its plan.
Lubinda said as long as the fund was not segmented for distribution to various groups of society, such as women and the youth, equity would not be possible. He said the commission would not attain equity if it operated as a high street bank.
“Are you segmenting these funds to ensure that women have their own competition? If that is not there, then this equity we are talking about is nothing but wishful thinking,” Lubinda said.
But Lintini said the commission was only mandated to implement the programme.
“We got the marching orders from you the parliamentarians, so if this is wishful thinking then it originated from you,” he said.
Lukulu West member of parliament Charles Kakoma wondered why the commission did not have guidelines on its operations months after its establishment.
Lintini explained that the commission was only set up in 2007 and its director was yet to take up office.
He assured the committee that the guidelines would be put in place after the director assumes office on May 12.
However, Lubinda wondered whether the commission needed more time to implement its programme.
“My concern is that we gave you (K140 billion) as parliament, but there are these issues to be put in place. Are we forcing you to swallow this bone even before you develop teeth to chew?” he asked.
Lintini said: “It would have been desirable if we had more time.”
President Levy Mwanawasa on Labour Day gave a directive for the commission to speed up its implementation work.
Lintini said the commission did not have the “luxury of time” and that it would abide by the presidential directive.
He said the commission expected its first initiative to be implemented in June this year.
Labels: CEC
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KCM, MCM nod CEC's proposed power tariffs
By Chiwoyu Sinyangwe and Joan Chirwa
Saturday March 01, 2008 [03:00]
MINING giants Mopani Copper Mines (MCM) plc and KCM plc have said the 35 per cent electricity tariffs hike proposed by CEC represents the position of their industry. But Zesco Limited senior marketing and public relations manager Monica Chisela said an agreement had not yet been reached regarding a tariff increment for the bulk power supply to the mines.
MCM commercial director Passmore Hamukoma said the Copperbelt Energy Corporation (CEC) had consulted the mining companies. He said the mines were currently waiting for an outcome of discussions between Zesco Limited and CEC.
“The statement that CEC has made represents the position of the mines on the matter,” Hamukoma said. “We are not going to speak independently because CEC has got the industry’s position and what is remaining is the negotiations between CEC and Zesco.”
And KCM Plc also confirmed that they agree with CEC on the new electricity tariffs under the bulk supply agreement.
Communications advisor Sam Equamo could not, however, confirm the percentage increase that the copper mining giant had agreed with CEC.
“I can confirm that we have agreed with CEC to increase the electricity tariffs,” said Equamo.
On Wednesday, CEC announced that it has proposed a 35 per cent increment to electricity tariffs for the mines under bulk supply agreement.
CEC executive chairman Hanson Sindowe said the electricity distributor had since written the proposed tariffs to Zesco limited for the utility company to effect the new rates.
In an interview, Sindowe described the new tariffs as “cost-reflective” for Zesco Limited.
“We have concluded the negotiation process with the mining companies who are our principal customer,” Sindowe said.
“We have proposed to adjust the tariffs by 35 per cent and the mines have agreed to this adjustment. So we are only waiting for Zesco to approve the new tariffs.”
He said CEC wrote to Zesco limited last December informing them on the proposed tariffs.
But Chisela said Zesco was not aware of the conclusion of negotiations on mining tariffs.
“We are surprised at the statement issued by CEC. As far as we know, negotiations are still going on and there are numerous issues that have to be agreed on before we settle for a certain percentage increase,” Chisela said.
“Zesco and CEC have to agree and issue a joint statement once negotiations are completed. CEC has submitted something but we are still negotiating and not that we have settled for a 35 per cent increase. However, we are getting close to the end of the negotiation period and we will be announcing the results afterwards.”
Zesco through CEC, engaged in negotiations with mining companies before effecting an increase in electricity tariffs under the bulk supply agreement, owing to a boom in copper prices on the international market.
The power utility indicated that the current tariffs for the mines were not cost-reflective, considering that the mining industry was making huge profits as a result of high metal prices.
Labels: CEC, ENERGY, KCM, MCM
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‘Mining firms set to finance power project
By HAGGAI CHILABI and SHAPI SHACINDA
FINANCE and National Planning minister Ng’andu Magande has said some mining firms are ready to provide partial financing for the Kafue Gorge Lower Power project, whose cost has been projected at $1 billion by Zesco. Mr Magande said
the offer by the mining companies was a response to current power shortages, which have affected copper and cobalt production on the Copperbelt. Mr Magande said Government had held preliminary discussions with the mines and the World Bank's lending arm, the International Finance Corporation (IFC), which has undertaken a to conduct a feasibility study and has been appointed as adviser.
"So far two of the mining companies have told us they are prepared to invest in energy because they use the energy. We met a few days ago and they told us they are prepared to invest in the Kafue Gorge Lower project," Mr Magande said in an interview on Wednesday.
Mr Magande said Government would meet the mining companies soon after details of the feasibility studies were completed to determine what contribution they would make.
"They want to know the cost and they are very anxious to improve power supply," Mr Magande said, but he did not name the companies.
He said the mining firms wanted to help curb power shortages, which have forced the Copperbelt Energy Company (CEC) to supply the mines with only 60 per cent of the 400 Mega-Watts supplied to the entire mineral-rich Copperbelt Province.
"If this shortage continues, it will be very disruptive to all of them and so they want to help to end it," Mr Magande said.
Zesco senior manager for Marketing and Public Relations, Monica Chisela, said the construction costs had escalated to $1.0 billion from the previous $750 million due to rising costs for equipment and machinery, including other construction costs.
The CEC has previously said it has been importing between 150 MW and 200 MW of power from the Democratic Republic of Congo (DRC) in efforts to plug the deficit.
The copper mines require up to 530 MW in order to meet production demands, and the shortage is expected to worsen when new mining projects are completed this year.
Ms Chisela said Zesco has been rationing power since the start of this year each time demand outstripped supply to keep the industry running and also to curtail a nationwide power blackout.
The entire Southern Africa Development Community (SADC) region is currently facing power shortages, with load shedding being carried in almost the whole region, including South Africa.
Labels: CEC, ENERGY, MINING
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CEC chief urges quick tariff review for mines
By Kabanda Chulu
Monday January 14, 2008 [03:00]
Copperbelt Energy Corporation (CEC) chairman Hanson Sindowe has said there is need to urgently complete negotiations with the mining companies with a view to increasing electricity tariffs. Last month, domestic power charges were increased by 27 per cent by Zesco Limited, but Sindowe declined to say how much the tariffs would rise for the copper and cobalt mining companies.
“Negotiations of the electricity tariffs with mining companies is an urgent matter that required thorough analysis and understanding especially that power supply is a key feature of development in the country and renegotiations are very complex and challenging in that the tariffs should be set at appropriate levels whereby they should not be too low or too high in order to attain the balance needed among the parties involved," Sindowe said.
"Currently, CEC is meeting representatives from the mining firms with a view to revise the tariffs upwards, but the challenge is that some mines are still waiting for approval from the company's boards and on our part we have to renegotiate on two fronts; Firstly with Zesco and secondly with the mines."
The mining companies pay lower rates compared to most industries after they negotiated lower tariffs at the time Zambia was privatising its copper mines in a bid to keep them running.
Nevertheless, Sindowe said the tariff rise negotiations were almost concluded with various foreign mining firms.
"We are currently negotiating with the mines and we are almost there, especially that we have agreed on the approach,” he said.
Sindowe explained that the power tariff increase by Zesco was a positive development because the company needed to become economically viable in order to ensure that Zambia reaped greater benefits from profits that foreign mining firms were reaping from higher global metal prices.
Since 1997, Copperbelt Energy has a Bulk Supply Agreement (BSA) with Zesco that is effective until 2020. This agreement entails CEC to buy electricity for onward transmission to its customers, which are mainly the mining companies.
CEC was formerly a Power Division under the defunct state mining conglomerate, Zambia Consolidated Copper Mines (ZCCM), and was established to ensure reliable and available supply to the mines.
Labels: BULK SUPPLY AGREEMENT, CEC, ENERGY, HANSON SINDOWE, MINING
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Govt starts quarterly meetings with Chamber of Mines
By Joan Chirwa
Monday December 10, 2007 [03:00]
Government has started holding quarterly meetings with the Chamber of Mines in an effort to strengthen the flow of information in the mining sector. The quarterly meetings are as a result of discussions held during the 5th Zambia International Business Advisory Council (ZIBAC) meeting in August this year where it was agreed that a new strategy be mapped in order to enhance the performance of the mining industry in the country.
One of the major reasons for the quarterly meetings, according to mines minister Dr Kalombo Mwansa, is for mining companies to start submitting reports every quarter on their operations in the country.
During an inaugural quarterly meeting for the Ministry of Mines and Minerals Development and the Chamber of Mines in Lusaka on Friday, Dr Mwansa said the government needed to have full information on the operations of the country’s mining sector.
“The purpose of these meetings is to keep the Ministry of Mines and Minerals Development informed on what is going on in the sector through the submission of quarterly reports by mining companies,” Dr Mwansa said.
“There is need for the ministry to have full information of what is happening and this can only be possible if government works closely with the mining companies, through the Chamber of Mines.”
Some of the key areas discussed during the inaugural quarterly meeting of the Ministry of Mines and the Chamber of Mines include the shortage of electricity in the country.
The mines constitute the largest consumers of electricity at around 50 per cent of Zesco’s total generation capacity, which is being supplied by the Copperbelt Energy Corporation (CEC).
Meanwhile, Zambia has this year been awarded with an outstanding achievement award in the mining sector by the International Conference on Mines and Money, an event which was organized by the Mining Journal.
Equinox minerals also won an award for its perseverance and determination in developing the Lumwana project in North Western Province, which commenced exploration works in 1999 at the time when copper prices were at a low of US $0.63 per pound.
Labels: CEC, CHAMBER OF MINES, KALOMBO MWANSA
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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
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Mutati ignored Levy's views on CEC sale
By Amos Malupenga
Friday September 21, 2007 [04:01]
Former energy minister Felix Mutati last year gave consent for CEC major shareholders to offload their shares to a consortium of Zambians contrary to government position and without authority from President Levy Mwanawasa, Post investigations have revealed. Commenting on last Friday’s Post editorial comment that called for a probe of Zesco managing director Rhodnie Sisala concerning his involvement in Zesco and Copperbelt Energy Corporation (CEC) and all the deals in CEC that have disadvantaged Zambians, Zesco sources disclosed during the week that Mutati, who is now commerce minister, would have more explanations to make than Sisala.
The editorial stated that Sisala, a shareholder in CEC, was even unable to deliverCEC to Zesco when the major shareholders in CEC were offloading their shares because he wanted his friends to acquire the shares.
“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 are shareholders in CEC,” the editorial stated.
Zesco supplies power to CEC at heavily subsidised rates for CEC’s onward supply to the mines at huge profits. This in turn has an adverse effect on Zesco customers who have to pay high electricity tariffs to keep Zesco afloat as it services CEC almost at a loss.
And Sisala last week complained that it was unacceptable for Zesco to continue subsidising mining companies through CEC when the mines were now making huge profits.
Giving a historical perspective of the power supply on the Copperbelt, a Zesco source said power on the Copperbelt was supplied by a company called Rhodesia-Congo border which was formed in the 1950 as a subsidiary of the mining companies.
According to the source, after Zambia’s independence in 1964, Rhodesia-Congo border Company was renamed as Copperbelt Power Company (CPC) but when the two mining companies on the Copperbelt were merged to form Zambia Consolidated Copper Mines (ZCCM), CPC became to be known as Power Division of ZCCM.
“But in 1997, as you recall, there was that programme by the Chiluba government to privatise the mines,” the source said. “During that process, there was the unbundling programme of the mines. This saw the Power Division of ZCCM becoming CEC.”
According to the source, CEC was formed in November 1997 as a venture between the Zambian government, Cinergy Corporation of the United States of America, National Grid Transco of the United Kingdom and five private investors who are referred to as the Local Technical (LTTPD). These private investors (Sisala, Humphrey Mulela, Aaron Botha, Hanson Sindowe and Charles Milupi) worked for CEC.
“Cinergy Global and National Grid each owned 38.5 per cent shares while the Zambian government owned 20 percent shares through ZCCM Investment Holdings (ZCCM IH),” the source said.
“The private investors owned 3 per cent. But the government also owns a Golden Share with limited specified rights. Therefore, Cinergy Global and the National Grid jointly became the major shareholders in CEC with 77 per cent shares.”
The source said CEC purchases the bulk of Zesco’s electricity and is responsible for the distribution of power to the mines.
“This accounts for 70 per cent of electricity consumption in Zambia,” the source said. “And this bulk purchase contract between CEC and Zesco is for 15 years so it will come to an end in 2012. This is the contract Mr. Sisala was saying there will be need to renegotiate it since the mines are now making huge profits. Basically, the price is US cent 1.7/Kwh which represents a 30 per cent price differential over what Zesco charges other customers.
This CEC/Zesco bulk supply contract represents a CEC significant asset base that can raise their funding requirements.”
But in 2005, the CEC major shareholders gave notice that they intended to offload their shares to a new entity, at the time, called Zambia Energy Corporation (ZEC) who were the potential purchasers of the shares. ZEC, which was incorporated on June 7, 2005 comprises three Zambians in the names of Abel Mkandawire, Hanson Sindowe and Malumo Siyanga. It also comprises an English company called ALDWYCH, DBSA (Development Bank of Southern Africa) and a Dutch development finance institution called FMO, among others.
According to information at the Patents and Companies Registration office, ZEC’s nature of business includes farming, safaris and travel agents, investment and property management, haulage and passenger transport.
According to the source, when this development arose, the government maintained that its objectives of ensuring that the operations and ownership of CEC remained under technically and financially qualified owner would be sustained.
“This was because the government realises the importance that CEC occupies in the development of the country’s energy and mining sectors,” the source said.
“The energy minister at the time, George Mpombo, suggested that for these reasons, Zesco or ZCCM-IH should be allowed to acquire those 77 per cent major shares in CEC or an international company from the UK called Fleming which also expressed interest in the purchase of those shares or indeed other potential suitors in CEC,” the source said.
“I am told President Mwanawasa was also of this view including Mr Sisala who I hear even wrote to Mr Mpombo in this connection.”
However, the CEC major shareholders at the time opted to sell their shares to ZEC.
According to the source, the government through the then permanent secretary in the Ministry of Energy rejected this intended transaction between Cinergy and National Grid on one hand and ZEC on the other. The permanent secretary stated that government would not give consideration to any further proposed sales.
According to the source, this decision was based on the fact that the government had rights of the special (golden) share.
“But some technocrats argued that while the government held the special share to give consent to any change in control of the shareholding, such consent could not be unreasonably withheld,” the source said.
“They suggested that the government would have to give justifiable reasons for such rejection in case the matter was referred for determination by experts. The technocrats further said that shares were a private property and that the special share held by the government in such a transaction could either have positive and adverse impact on Zambia as an investment destination.”
It was also argued that while the government and ZCCM-IH had limited pressure points, they had strengths in approaching the major shareholders in that ZCCM -IH could increase its 20 per cent shares on condition that it offloaded the additional shares on the stock exchange. The source also said the government could also block a change of control of shares in the new shareholder was not financially and technically capable.
“But legal experts also advised that the ability to sell one’s shares was a core right for shareholders and corporate law left it to the market,” the source said. “They said in this case, market existed for Cinergy and National Grid shares.
Therefore, it was suggested with this in mind that while government did not have any say in the sale of share process by the CEC major shareholders, the process could be helped by the government making known its position in order to avoid delays in providing consents required under the special share.”
The source said it was resolved, at this point, that a Task Force team be established under the chairmanship of the Ministry of Energy but with members from ministries of commerce and mines and ZCCM-IH. This team was then to negotiate with CEC’s major shareholders.
“But before this was done, it was resolved that Cinergy and the National Grid should not insist on dealing exclusively with ZEC because they had a duty of being responsible corporate citizens and should therefore give or have given an opportunity for the government to address its concerns on the nature of the shareholder to replace them in CEC,” the source said.
“It was also felt that since CEC occupies an important role in Zambia’s future mining development, adverse long term effects would occur if the transaction was not properly handled.”
And on August 5, 2005, ZCCM-IH held a board meeting where it was re-stated that Cinergy and National Grid was considering selling their 77 per cent in CEC to ZEC. In a letter to President Mwanawasa dated August 8, 2005, mines minister Kalombo Mwansa stated that although CEC was debt-free, its majority shareholders’ intention was to make CEC borrow US $50 million out of which CEC should pay its shareholders a special dividend totalling US $47.9 million.
“The majority shareholders would then sell their shares to ZEC, leaving CEC with the debt,” Mwansa stated. “All CEC assets would then remain as collateral to the debt.” Mwansa further stated that ZCCM-IH was uncomfortable with the collateralisation and payment of the special dividend.
“While ZCCM-IH cannot stop the exit of the majority shareholders from CEC, it wants to see CEC left with the capacity to meet the growing demand of electricity in the mining industry, and with a strategic partner that has experience in the electricity industry and the technological and financial strength to move CEC forward,” Mwansa stated. “Your Excellency, I share the concerns of ZCCM-IH and therefore support its intention to express the concern to the majority shareholders.”
And on September 1, 2005, the then energy minister George Mpombo wrote to President Mwanawasa, expressing concerns that Cynergy and National Grid were disregarding the rule of law in their bid to offload their shares in CEC.
“Today…Mr. A. Sindowe of CEC came to brief me that they are on course with the arrangements to buy 77 percent of the shares,” Mpombo stated. “Mr Sindowe is leading the CEC backed consortium. He further revealed that the US $100,000,000 deal has been supported by ABSA Bank of South Africa and FMO of the Netherlands. The fact that government holds a golden share through ZCCM IH on pre-empt rights basis has been ignored with impunity.
“I stressed to Mr. Sindowe that government will do all it takes to protect the interest of Zambians and will not surrender an inch of its sovereignty to National Grid or Cynergy.”
And another Zesco source revealed that when Felix Mutati succeeded Mpombo, he continued on this assignment but with a different determination and zeal. The source said at one point, there was even an announcement in the media that the majority shares in CEC had finally been offloaded.
Later, Mutati – on behalf of the Task Force team comprising officials from his ministry and those of mines and finance - wrote to President Mwanawasa on March 2, 2006 asking for his guidance on the recommendations by the Task Force team that the government, as a special shareholder, should consent to the sale of CEC shares.
Mutati stated that his team arrived at this recommendation through a series of meetings which established that earlier concerns by ZCCM-IH had been taken care of because Cynergy and National Grid were to sell shares to ZEC without placing CEC in debt.
He further stated that ZEC’s financial and technical competence had been assured by the financial support that included a US$50 million for capital expenditure in CEC, and by a two-year contract for National Grid to continue providing its technical expertise.
Mutati stated that Cynergy and National Grid had informed them that there was room for other investors to take up shares in CEC although this could only be done through the Lusaka Stock Exchange where ZEC would place 22 per cent of their shares.
“It is a condition of the lenders of funds to Zam-En (ZEC) that these shares should be placed in this way. Documentary evidence for this requirement is attached,” stated Mutati.
But in his response to Mutati’s letter, twelve days later, President Mwanawasa stated that he was unable to comment because he was not earlier briefed on the same.
“…I regret that I am unable to comment on this matter on which I would have expected you to brief me before reading in the press that the shares of the two companies have been sold and I assume therefore that that was done with your support ostensibly giving the consent of the Government of the Republic of Zambia to the transfer of the shares,” President Mwanawasa stated. “I am aware that many difficulties will arise but it is my hope that you will be capable of resolving them.”
President Mwanawasa, in another letter to Mutati on March 27, 2006, stated that he was disappointed with Mutati because he allowed the two companies to dispose off their shares without affording ZCCM-IH an opportunity to exercise their option.
He stated that after studying and analysing the necessary documents, he discovered that the transaction (sale of shares) would be based on CEC borrowing US$73 million of which US $47.9 million would “be utilised to pay a special dividend to the current shareholders i.e. a share of US $38.3 million between Cynergy and National Grid US $9.6 million to ZCCM-IH whilst US $2.1 million remains with CEC as working capital”.
“Indeed, this is exactly what the previous Minister (Mpombo) feared would happen as ably explained in his letter dated 8th August, 2005,” President Mwanawasa stated.
He stated that the documents availed to him did not demonstrate ZEC’s officials’ financial standing. He stated that at least they should have provided letters of comfort from their own personal bankers since they were not corporate.
“I do not doubt their personal standing in society but what is important is to give confidence in the business community especially the mines that if anything goes wrong e.g. an accident, the new owners would be in a position to mobilise enough resources to rectify or attend to the problem,” President Mwanawasa stated.
But when reached for comment to confirm whether or not he gave consent for the major shares in CEC to be offloaded without authority from President Mwanawasa or Cabinet, Mutati said on Tuesday that while there was consent from the highest authority, he would rather that the chief government spokesperson responded since that was a government transaction.
However, information minister Mike Mulongoti who is chief government spokesperson, also refused to comment on the matter.
“I was not a chief government spokesperson at the time these things were happening so I might not be conversant with that issue,” Mulongoti said. “But since Hon Mutati told you that there was consent from the highest authority, you contact that highest authority for comment or clarifications.”
And when contacted on Wednesday, President Mwanawasa said: “Yes, I was consulted on that issue but for one and half years, I kept on refusing and later the consent was given without my authority. That’s all I can say for now. Tomorrow (yesterday), I will be leaving for New York. When I return, I will give details on that issue at a press conference.”
Labels: CEC, FELIX MUTATI
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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.
Labels: CEC, CORRUPTION, PRIVATISATION, ZESCO
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