ERB to hike tariffs for mines
By Gift Chanda in Lusaka and Darious Kapembwa in Kitwe
Fri 22 June 2012, 13:25 CAT
THE Energy Regulation Board plans to gradually hike electricity tariffs for mining firms to achieve cost reflectivity by 2015. ERB director for infrastructure and regulation, James Manda, said the energy regulator would like all mining companies by 2015 to be paying electricity tariffs that reflect the true cost of producing power.
He told the mining and energy conference in Lusaka on Wednesday that the ERB would gradually raise the electricity tariffs in the mining sector to cost reflectivity by 2015.
"We want to see this migration by 2015," Manda said.
And energy minister Christopher Yaluma said the country was far from achieving electricity tariffs that reflect the true cost of producing power.
"From where we are, we are not even close to what we would like to see from the initial stage and that is why we are saying the next tariffs we are going to approve will start having that element of cost reflectivity in them," Yaluma told journalists on the sidelines of the conference.
"That is what is going to sustain or woo investors to go in hydro power generation because that cost of doing maintenance works will be embedded in the tariffs. As it is, power producers have got to strive to do their maintenance because the power is given without taking into consideration that cost element which would maintain the equipment."
Yaluma said sustainable development could only be achieved with adequate energy generation and supply.
He noted that currently the level of power generation in Zambia was inadequate to meet the demand of the mining industry.
He urged the private sector to work with the government and invest in the country's energy sector to address the current energy shortfall.
Electricity is a major issue in Zambia as the mining sector in Africa's top copper producer is power hungry and growth over the next few years could be constrained by available supply.
The power shortfall in the country has triggered widespread blackout and forced the country's power utility, Zesco, to be rationing power.
Zambia, however, expects to have a power surplus of about 600 megawatts (MW) by 2016, which should help ease the electricity deficit facing southern Africa.
Meanwhile, a mining consultant has proposed that the government and mining companies build two dams in Copperbelt and North Western provinces for hydro power generation.
Makesa Kalifungwa, who is also proprietor of Goldenberg Mining in North Western Province, suggested that all mining companies should accept to go into partnerships with Zesco and the government to build sustainable power sources in the country that would ultimately reduce load-shedding as well as the cost of doing business.
"This will also reduce the cost of electricity. Such ventures will have multiple effects in that fish farming will be enhanced and the manufacturing sector will be boosted because power will be cheaper," Kalifungwa said.
He said mining companies being the biggest power consumers should have no problems venturing into such projects and cited Copperbelt Energy Corporation as having embarked on power projects.
Kalifungwa also urged the government to intensify oil explorations in parts of the country that had been long earmarked for such activities.
"Feasibility studies have been done before and these studies have revealed that there is oil in notable areas in the country, so the best is to allocate adequate resources in the budget to go towards exploration of oil," he said.
Labels: ENERGY, ERB, MINING
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Auditor General vows to ‘dig a little deeper' into oil scams
By Moses Kuwema
Fri 13 Apr. 2012, 13:27 CAT
AUDITOR General Anna Chifungula says her office will dig a little deeper and get more evidence for the investigative wings once they read the report on the Energy Regulation Board and the oil procurement process.
And former Public Accounts Committee chairman Emmanuel Hachipuka says investigative wings should delve into the oil procurement contracts and ensure the culprits were brought to book.
Commenting on revelations by Wynter Kabimba, the chairman of the commission of inquiry into the Energy Regulation Board and oil procurement, in which the government lost about K2 trillion through corruption between 2007 and 2011, Chifungula said her office was active to the revelations.
"Normally what we do is we will look at the report as well when it is issued and see if there are some areas which we can dig a little bit deeper so that we can get more evidence for our investigative wings. At face value, it's difficult to find some of these things, you have to do other types of audits," Chifungula said.
Chifungula said most of the issues raised in the revelations were done through tendering and other procedures.
"So they would come out if it is in financial reports, they will come out as normal because there will be proper tender procedures followed and everything will be in line but then the question now which comes in is value for money. Did we get value for what we got? So those are a little bit complicated because you need to do other types of audits like forensic and investigations. You have to do performance audits in order to get to those kinds of things," she said.
And Hachipuka who served as PAC chairman during the period in question, said K2 trillion or any other sum for that matter was too large for the country to afford to lose.
He said it was important for investigative wings to delve into the matter and as recommended by the commission, give Cabinet more details and pursue the contracts to the letter.
"It is very important, it's a lot of money to let go. I am very disappointed that it is coming out so late. I think it should have been picked up much earlier. Certainly, I know that PAC can simply talk about it but I think the Auditor General has also powers to have referred these matters to the necessary security wings of the government beyond her office. But I am not privy to know exactly where the omission was, whether they were covered. But really for me, it is a serious revelation which deserves follow up," Hachipuka said.
Hachipuka further said he did not recall covering the Auditor General's report on contracts in question.
"Anna Chifungula and her team are quite a very thorough group, it is possible those were not in the recent past. Many discussions in the PAC have been based on audit reports and this to me seems to be a special audit. In fact, I am surprised that the commission under Wynter Kabimba was focusing specifically on that, but I think it was a correct thing to do. I was a member of the PAC for many years but I don't remember us dealing specifically with this and in any case I am happy that these have come to light and whilst it is the commission of inquiry, I would imagine that cabinet will ask the Auditor General to specifically go in more details," he said.
Meanwhile, Chifungula said the audit report on the Citizens Economic Empowerment Commission (CEEC) has been completed.
"They have basically finished and are compiling the report. We should have the first draft presented to the CEEC and then after they respond to the findings, that's when we can now conclude the report," she said.
In February this year, secretary to the treasury, Fredson Yamba, suspended the disbursing of funds to the CEEC in order to reorganise the institution.
A forensic audit was further instituted to look at the CEEC operations.
Labels: ANNA CHIFUNGULA, AUDITOR GENERAL, CORRUPTION, ERB, OIL, WYNTER KABIMBA
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K2 trillion lost in corrupt oil procurement deals-Kabimba report
TIME PUBLISHED - Tuesday, April 10, 2012, 2:35 pm
The Commission of Inquiry constituted to investigate the operations of the Energy Regulation Board and the procurement of crude oil has revealed that from 2007 to 2011 the country lost about K2 trillion through acts of malpractices in the procurement system.
Commission chairperson Wynter Kabimba says the alleged corruption in the oil procurement system involved officials from the Zambia Public Procurement Authority (ZPPA) the Ministry of Energy and the ERB.
Mr. Kabimba noted that the commission also learnt that the companies that were allegedly corruptly engaged in the procurement oil have since bid again for a tender to supply fuel.
Mr. Kabimba has since recommended that the officers allegedly involved in corrupt activities be brought to book.
Another commission of inquiry tasked to investigate the installation of a Radar system at the Kenneth Kaunda Airport noted that the ministry of communication and transport interfered in the awarding of the contract by quashing the contract that had already been finalized by the ZPPA and given to Thales Air Systems of South Africa.
Commission chairman Sebastian Zulu has since recommended that the contract awarded dubiously awarded to Salex an Italian Company.
And President Michael Sata in commenting on the reports presented to him noted that they were too technical and directed the Secretary to the Cabinet to institute a technical committee that will prepare a cabinet memo to allow the government to study and come up with a decision on the matter.
Meanwhile President Sata has sworn-in Pastor Godfridah Sumaili, Dr. Steven Moyo and Irene Lamba as ACC commissioners and deputy Director General of the ACC respectively.
The president has also sworn-in veteran broadcaster Frank Mutubila as the Zambia’s ambassador to Italy while Ogeon Gondwe is the new senior private secretary for State house.
[QFM]
Labels: ERB, OIL, PROCUREMENT SYSTEMS, WYNTER KABIMBA, ZPPA
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ERB bemoans absence of national strategic oil stock
By Chiwoyu Sinyangwe
Wed 01 Feb. 2012, 13:59 CAT
THE continued absence of national strategic petroleum stocks poses a risk to the security of supply, says Energy Regulation Board.
And ERB stated that the recent pronouncement by energy permanent secretary George Zulu that Angola has agreed to supply finished petroleum products to Zambia via a suggested joint venture firm similar to TAZAMA which Zambia shares with Tanzania may not offer an immediate or short-term solution to the challenges faced by Zambia.
On October 7, 2011, newly-appointed energy minister Christopher Yaluma announced that the government had reduced fuel prices by average 6.4 per cent as it scraps off the K65 per litre Strategic Reserve Fund (SRF).
The SRF, prior to its abolishment, compelled Oil Marketing Companies to keep 15 days operating stocks. By the government abolishing SRF, the measure has been discontinued because the cost of keeping such stocks was removed from the fuel cost build-up in October last year.
"Government said it would keep such stocks," according to the ERB Status report on Petroleum sector.
"However, the government is currently still constructing storage facilities for such stocks. Once the storage facilities have been constructed and the strategic reserves procured, security of supply will be enhanced. ERB supports rehabilitation and construction of storage facilities by the government countrywide."
The Status report on Petroleum sector stated that ERB has developed a licence to allow the private sector to construct and operate storage facilities as a business.
"While the downstream petroleum sector has evolved over the years, the spine of the Zambian fuel supply chain has remained to be TAZAMA and INDENI. More than anything else, these two installations have the greatest impact on the profile and performance of the Zambian petroleum industry," stated the report.
"As long as the feedstock which is imported for Zambia continues to contain a higher proportion of diesel than was initially envisaged, the cost of fuel in Zambia will be higher than that obtaining in neighbouring countries. Zambia therefore needs to address this structural problem if the high prices of fuel are to be contained."
And the status report observed that high fuel taxes worsened already high pump prices in the country.
"The high taxes charged on fuel, and the ad volerum nature of these taxes only further accentuate the situation," the report read in part.
"With every rise in the pump prices, the amount of taxes collected by government per liter of fuel also increases, placing a never ending burden on the consumer. If the taxes were absolute amounts, citizens would have a relief and prices would not be as high."
Meanwhile, the ERB status report stated that while there were increasing calls for Zambia to consider sourcing her petroleum requirements from alternative sources such as Angola, the numerous challenges presented by such options need to be well understood.
"The Angolan option would call for construction of a pipeline/rehabilitation of the Bengwela railway line and the upgrading of Indeni to crude refining capacity," stated ERB.
"Since Angola also imports her finished products requirements, she may not be in a position to supply Zambia with finished products. Given the lead times for pipeline construction, the Angolan Option may not offer an immediate or short term solution to the challenges faced by Zambia. Further, most oil shipping companies are concentrated in Western Europe, the Middle East and Asia Region."
Labels: ERB, FUEL, OIL
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President Sata dissolves ERB board
TIME PUBLISHED - Friday, September 30, 2011, 1:25 pm
Republican President Michael Sata has with immediate effect dissolved the Energy Regulation Board (ERB)board. President Sata has since appointed a commission to be headed by Patriotic Front General Secretary Wynter Kabimba to probe corruption allegations surrounding ERB.
He says there is need to ascertain why the prices of petroleum products in the country have continued to sky rocket.
The President has also demanded reports on the sale of Finance Bank Zambia Limited to First National Bank of South Africa and the National Pension Scheme Authority (NAPSA) Zambia National Building Society (ZNBS) deal to be availed to his office within 30 thirty days.
The $98 million NAPSA deal recently raised questions from several members of the public over the manner the transaction was handled.
President Sata was speaking at State House this morning when he swore in all appointed cabinet and deputy ministers.
And President Sata has urged all those appointed in various ministerial positions to work to the best of their ability in order for Zambians to benefit from their services.
[QFM]
Labels: ERB, MICHAEL SATA, ZNBS
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Fuel increase threatens economic gains - Saasa
By By Gift Chanda
Sun 13 Feb. 2011, 04:01 CAT
THE fuel price hike is likely to affect the country's economic projections this year, says economic consultant Professor Oliver Saasa. And energy consultant Andrew Kamanga said the increase in fuel prices was inevitable considering the rise in oil prices on the international markets.
The Energy Regulation Board (ERB) on Friday announced an increase of almost K1,000 in the fuel pump price. A litre of petrol was adjusted from K7,639 to K8,647 while diesel was increased from K6,999 to K7,958 per litre. The price of kerosene has now been pegged at K5,641 from K5,008 per litre.
ERB attributed the increase to the rise in prices of crude oil which have surpassed US$100 per barrel on international markets and the depreciation of the kwacha. It stated that the latest cargo of crude was procured last December at US$81 million compared to the May 2010 consignment procured at US$68.6 million when the last price review was done.
In an interview, Prof Saasa said the country’s growth projections were not likely to be met this year if fuel price hikes were not stabilised quickly.
He said this also threatened to reverse the recent economic gains.
Prof Saasa said the country was likely to experience an increase in inflation while gross domestic products faces a reduction from what was being projected because costs of inputs in the production line may go up if fuel prices were not stabilised.
¨The long-term effect of this is actually transferring the effect to the consumers and also to production which will have a disturbing effect on prices,” he said.
¨Fuel is one of the inputs in production and with these increases, one hopes that the effect is not too significant to seriously affect the economic fundamentals because if it does, it may affect our growth projections.”
He said despite ERB increasing fuel by a minimal K866, transport costs were likely to go up.
¨You find that the increases in transportation costs are not proportionate to the actual increase of the cost of fuel so the consumer bears the brute. So one hopes that they will be some level of restraint on those in the transportation sector,” said Prof Saasa.
But Kamanga said the increase was unavoidable.
¨The question is that will we be able to absorb it in the economy without affecting the key parameters such as the projected inflation and economic growth? If we are able to manage or cushion the impact then that will be good,¨ he said. ¨But in a practical scenario any increase in fuel especially diesel, which is used in production, is that almost automatically we start seeing the prices of commodities going up, transport is one of them.¨
Kamanga said the transportation costs would threaten maize prices.
¨We are going closer to the end of the rainy season into harvest period. We hope that this will not lead to an increase in price of maize, which obviously the farmers will be happy with,¨ he said.
He said in the short term, the fuel price increase may have an impact on the economic growth the country achieved last year.
¨We are just in February and our budget cycle starts in January so the impact may not be that much. But we have to see how sustainable these prices are going to hold. If they are going to hold for the next one quarter, then we can safely say the negative impact will be manageable, if it exceeds that then definitely inflation is going to go up," said Kamanga.
Labels: ANDREW KAMANGA, ECONOMY, ERB, FUEL, OLIVER SAASA
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ERB authorises 25.6% Zesco tariff increase
By Chiwoyu Sinyangwe
Tue 27 July 2010, 04:01 CAT
THE Energy Regulation Board (ERB) has authorised Zesco Limited to hike electricity tariffs by 25.6 per cent despite the deterioration in its quality of service and high expenditure on staff emoluments, accounting for 51 per cent of its total costs.
Residential consumers will be the hardest-hit by the electricity tariff increases, with domestic power tariffs expected to rise by 41 per cent, followed by small power consumers at 14 per cent and large power consumers at 12 per cent.
Power utility Zesco had proposed to raise electricity tariffs by an average 36 per cent for 2010 and an average tariff adjustment of 21 per cent for 2011, 14 per cent for 2012, eight per cent for 2013 and nine per cent for 2014.
Announcing the approved tariff increases for 2010/2011, ERB chairman Sikota Wina yesterday said increasing electricity costs for Zesco was not the only solution to the challenges of Zesco’s operations.
“The utility needs to re-engineer its internal business processes and transform itself into a fully-fledged commercial entity,” Wina said. “The Energy Regulations Board (ERB)’s findings are that Zesco’s quality of service has generally deteriorated as indicated by the utility’s 2009 Key Performance Indicators.”
Wina admitted that Zesco had failed to meet the Key Performance Indicators (KPIs).
“That Zesco has not yet shifted its staff to regular residential tariffs, contrary to the board’s directive and that the power rehabilitation project has experienced delays in completion and the utility is facing post rehabilitation challenges on projects,” he said.
Wina said Zesco had been allowed to hike the tariffs outside the KPIs as the power utility would not have met the indicators to warrant a hike.
“The utility’s performance against the agreed KPIs has been unsatisfactory,” said Wina. “Restricting revenue requirements to KPI scores would have resulted in the utility getting lower revenues than the appropriate revenue requirements. The utility was therefore given a grace period of up to March 2011. During the intervening period, the ERB has continued to monitor Zesco’s performance in relation to KPIs… Zesco staff costs in relation to its total operating cost are still high at 51 per cent of total costs. The international standard is 31 per cent.”
Labels: ERB, TARIFFS, ZESCO
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Energy board hikes pump prices again
By Chiwoyu Sinyangwe
Wed 12 May 2010, 05:20 CAT
The current increase comes barely four months after ERB announced a 15 per cent increment last January. THE Energy Regulation Board (ERB) has announced an increase in fuel prices by between 9.8 per cent and 13.18 per cent effective midnight Tuesday.
The current increase comes barely four months after ERB announced a 15 per cent increment last January.
ERB acting director Dr Mushiba Nyamazana attributed the increase to rising international fuel prices as well as the government’s decision to phase out fuel subsidies.
“As the global economy is slowly moving out of the recession and the demand for energy/petroleum products is beginning to increase, the international prices of oil begun to surge upwards,” Dr Nyamazana stated in a news release today.
“As such, the government cannot continue to absorb the high costs associated with keeping pump prices artificially low.
To this effect the fuel prices have been revised gradually to cost recovery levels…”
Dr Nyamazana stated that Ndola would continue to have the lowest price for fuel at K7, 461 per litre for petrol, K6, 786 for diesel and K4, 798 per litre for kerosene.
On the other hand, Kasama would continue to have the highest price for fuel at K8, 390 per litre for petrol, K7, 717 for diesel and K5, 598 per litre for kerosene.
“The Energy Regulation Board (ERB) wishes to inform the public that prices of petroleum products have been revised upwards by 13.18 per cent (K882 per litre) for petrol, diesel 9.5 per cent (K598 per litre and kerosene 10.98 per cent per litre, based on Lusaka pump prices, with effect from midnight tonight,” stated Dr Nyamazana
Labels: ERB, INFLATION
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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’s tax review is imminent, reveals ERB
By Mutale Kapekele
Tue 13 Apr. 2010, 04:50 CAT
ZESCO’s application for the review of electricity tariffs is expected soon, the Energy Regulation Board (ERB) has disclosed.
According to a presentation paper from the ERB to the Zambia National Farmers Union corporate and agribusiness members who were discussing the outlook for electricity and fuel supply and pricing in 2010, the board stated that electricity tariff review was imminent.
"In the immediate future, it is imminent that the demand for power is on the upswing again after the revival of investments into the mines driven by booming copper prices," the ERB stated. "In terms of pricing, ZESCO’s application to review tariffs for 2010 has not yet reached ERB but it's expected anytime soon."
The ERB also disclosed that information for the third quarter of 2009 showed that ZESCO had achieved 75 per cent of the Key Performance Indicators but the outcome of the fourth quarter was still being awaited.
On the fuel outlook, the ERB indicated that the government had issued assurances that the shortage of fuel, which has repeatedly occurred in the past when Indeni closed down for yearly maintenance programmes, will not be repeated this year.
"As for fuel price adjustments, ERB advised that the price of fuel is worked out on a cost plus formula per cargo supply of oil which allows for some stability in terms of price changes but has some weaknesses as some inefficiencies are built in," the board stated.
The ZNFU has urged the government to encourage all new mines to invest in new power generation.
Labels: ERB, TAXATION, ZESCO
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‘Govt shouldn’t blame ERB for fuel shortage’
By Kabanda Chulu
Wed 04 Nov. 2009, 04:01 CAT
GOVERNMENT should not blame the Energy Regulation Board (ERB) for the countrywide fuel shortage because energy permanent secretary Peter Mumba had written to oil marketing companies (OMCs) assuring of a price increment when finished petroleum products are imported, The Post has been informed.
And sources at Ministry of Energy have dismissed chief government spokesperson Lieutenant General Ronnie Shikapwasha's assurances that fuel supply will normalise soon, saying the fuel stocks were too little to meet Zambia's daily consumption of about 700,000 litres for petrol and over 900,000 litres for diesel.
Despite Lt Gen Shikapwasha's assurances, several service stations in Lusaka do not have sufficient fuel and petrol attendants revealed that they were selling whatever stocks they received.
According to a letter dated October 19, 2009 and addressed to OMCs, Mumba stated that his ministry and that of finance and the ERB were working together on the figures for the duty waivers based on the agreed quantities of 11 million litres for petrol, 21 million litres of diesel and one million litres of kerosene that would be imported by the 17 OMCs registered in the country.
“As you will recall, it was agreed during our meeting at State House on 14th October 2009 that OMCs should also be allowed to import finished petroleum products during the period of the Indeni Refinery shutdown in order to supplement government imports, as agreed this letter serves to inform you that government will provide duty waivers to the OMCs on the imported diesel and unleaded petrol,” stated Mumba.
“As agreed at State House by yourselves that the reduction of duties only will still not make the importation of petrol economical, government is therefore working on a slight upward adjustment in the price of petrol and you will be advised in due course of details of the price increase.”
On Thursday, October 29, 2009, ERB acting executive director Lukonde Mfula announced that prices of petroleum products had been revised upwards with diesel increasing from K5,478 to K6,026 per litre while petrol prices had been pegged at K5,818 from K6,932 per litre.
Mfula stated that the current price review was necessitated by the importation of refined petroleum products during the on-going shutdown of Indeni Refinery as well as changes in international oil prices and also the inclusion of a K65.00 per litre cost line that has been introduced to finance cost of holding 15 days statutory operating stocks by all OMCs.
But ERB board chairman Sikota Wina immediately withdrew Mfula's statement and said there were more pressing matters concerning fuel supply stability in the country and fuel pricing was not one of them.
However, the sources said the ERB made a decision looking at Mumba's assurance to the OMCs and what would be the landed cost of the imported petroleum products.
The sources stated that the decision to import fuel products does not rest with government but with OMCs since it is purely a business decision.
“Government wants the situation to look as though ERB ignored or did not consult the board but this was not the case since the action taken by management at ERB was within its mandate. As a result of politics, Wina was forced to overrule management to show that there is no coordination and yet it was agreed by all stakeholders that importation of petrol will only make sense with price increment,” the sources said. “OMCs can import fuel products any time they want but since the price is regulated by government through ERB, then OMCs have to request for waivers or upward adjustment of prices in order to make some profit.”
Last Friday, finance minister Dr Situmbeko Musokotwane issued statutory instrument (SI) number 89 of 2009 to waive 25 per cent duty on importation of petroleum products but industry experts have argued that only diesel will be profitable for OMCs to import since its excise duty stands at seven per cent while that of petrol is pegged at 36 per cent hence there might be reluctance in importing the commodity.
The sources further stated that assurances by Lt Gen Shikapwasha were not true since national daily consumption outstrips what TAZAMA was holding in reserves.
Lt Gen Shikapwasha on Monday stated that TAZAMA had 1,705,000 litres of petrol against a daily consumption of 700,000 litres while for diesel, TAZAMA was holding 896, 000 litres which is far short of the over 900,000 litres national daily consumption.
On August 28, 2009, Dr Musokotwane issued SI number 55 of 2009 to allow the ministry of energy to import diesel duty free but since the ministry does not have capacity, it contracted, without tender procedures, Dalbit Petroleum of Kenya and IPG of Kuwait to import the commodity.
Labels: ERB, FUEL, PETER MUMBA
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‘Govt shouldn’t blame ERB for fuel shortage’
By Kabanda Chulu
Wed 04 Nov. 2009, 04:01 CAT
GOVERNMENT should not blame the Energy Regulation Board (ERB) for the countrywide fuel shortage because energy permanent secretary Peter Mumba had written to oil marketing companies (OMCs) assuring of a price increment when finished petroleum products are imported, The Post has been informed.
And sources at Ministry of Energy have dismissed chief government spokesperson Lieutenant General Ronnie Shikapwasha's assurances that fuel supply will normalise soon, saying the fuel stocks were too little to meet Zambia's daily consumption of about 700,000 litres for petrol and over 900,000 litres for diesel.
Despite Lt Gen Shikapwasha's assurances, several service stations in Lusaka do not have sufficient fuel and petrol attendants revealed that they were selling whatever stocks they received.
According to a letter dated October 19, 2009 and addressed to OMCs, Mumba stated that his ministry and that of finance and the ERB were working together on the figures for the duty waivers based on the agreed quantities of 11 million litres for petrol, 21 million litres of diesel and one million litres of kerosene that would be imported by the 17 OMCs registered in the country.
“As you will recall, it was agreed during our meeting at State House on 14th October 2009 that OMCs should also be allowed to import finished petroleum products during the period of the Indeni Refinery shutdown in order to supplement government imports, as agreed this letter serves to inform you that government will provide duty waivers to the OMCs on the imported diesel and unleaded petrol,” stated Mumba.
“As agreed at State House by yourselves that the reduction of duties only will still not make the importation of petrol economical, government is therefore working on a slight upward adjustment in the price of petrol and you will be advised in due course of details of the price increase.”
On Thursday, October 29, 2009, ERB acting executive director Lukonde Mfula announced that prices of petroleum products had been revised upwards with diesel increasing from K5,478 to K6,026 per litre while petrol prices had been pegged at K5,818 from K6,932 per litre.
Mfula stated that the current price review was necessitated by the importation of refined petroleum products during the on-going shutdown of Indeni Refinery as well as changes in international oil prices and also the inclusion of a K65.00 per litre cost line that has been introduced to finance cost of holding 15 days statutory operating stocks by all OMCs.
But ERB board chairman Sikota Wina immediately withdrew Mfula's statement and said there were more pressing matters concerning fuel supply stability in the country and fuel pricing was not one of them.
However, the sources said the ERB made a decision looking at Mumba's assurance to the OMCs and what would be the landed cost of the imported petroleum products.
The sources stated that the decision to import fuel products does not rest with government but with OMCs since it is purely a business decision.
“Government wants the situation to look as though ERB ignored or did not consult the board but this was not the case since the action taken by management at ERB was within its mandate. As a result of politics, Wina was forced to overrule management to show that there is no coordination and yet it was agreed by all stakeholders that importation of petrol will only make sense with price increment,” the sources said. “OMCs can import fuel products any time they want but since the price is regulated by government through ERB, then OMCs have to request for waivers or upward adjustment of prices in order to make some profit.”
Last Friday, finance minister Dr Situmbeko Musokotwane issued statutory instrument (SI) number 89 of 2009 to waive 25 per cent duty on importation of petroleum products but industry experts have argued that only diesel will be profitable for OMCs to import since its excise duty stands at seven per cent while that of petrol is pegged at 36 per cent hence there might be reluctance in importing the commodity.
The sources further stated that assurances by Lt Gen Shikapwasha were not true since national daily consumption outstrips what TAZAMA was holding in reserves.
Lt Gen Shikapwasha on Monday stated that TAZAMA had 1,705,000 litres of petrol against a daily consumption of 700,000 litres while for diesel, TAZAMA was holding 896, 000 litres which is far short of the over 900,000 litres national daily consumption.
On August 28, 2009, Dr Musokotwane issued SI number 55 of 2009 to allow the ministry of energy to import diesel duty free but since the ministry does not have capacity, it contracted, without tender procedures, Dalbit Petroleum of Kenya and IPG of Kuwait to import the commodity.
Labels: ERB, FUEL, OMCs, PETER MUMBA
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HH accuses Rupiah of scheming food crisis
By Staff Reporters
Wed 21 Oct. 2009, 15:31 CAT
UPND leader Hakainde Hichilema yesterday said President Rupiah Banda wants the current fuel crisis to cause food shortages so that his sons can supply GMO maize to the government.
And Economics Association of Zambia (EAZ) immediate past national secretary Chibamba Kanyama has observed that the current situation in the energy sector has clearly shown that Minister of Energy Kenneth Konga does not know what is going on.
Hichilema said the current fuel shortage was a huge cost to the country’s economy and on ordinary life of Zambians. Commenting on the current fuel shortage, Hichilema warned that if not checked, the fuel crisis would result in food shortages.
“Rupiah is directly responsible because of his meddling in the awarding of the fuel tenders. Things are now coming out so he is just deceiving himself,” Hichilema said.
“Fuel is the engine of the economy. When fuel runs out itís going to cause shortages in food including job losses. He (Rupiah) is directly responsible because of meddling in the awarding of tenders. They want to give tenders to their sons so that they bring in Genetically Modified Organisms (GMO) maize when there are food shortages as a result of the fuel crisis.”
He said President Banda’s irresponsibility and corruption was beginning to negatively affect the lives of Zambians.
“Rupiah’s corruption and incompetence has come here to roast. Initially the minister of energy (Kenneth Konga) said there was enough fuel. He must come out and apologise,” he said.
He insisted that President Banda was behind the current fuel crisis.
“Because of his desire to favour certain persons he is causing this fuel crisis. The fuel situation has been going on well until he started to meddle in this sector. Just look at the queues around town, look at the lost production hours. All this is caused by an incompetent head of state,” Hichilema said.
“Then he is coming out to say nobody should be blamed. He is basically saying he is not the President of Zambia. If somebody did a calculation of the cost arising from the fuel shortage, loss of production, loss of man hours, it’s a huge cost to the economy of the nation and on ordinary life.”
Hichilema said President Banda was guilty over the current fuel crisis.
“The guilty are always afraid, he is guilty. Rupiah Banda thinks he is very clever,” said Hichilema.
“He is now worried and saying nobody should be blamed because he knows where this thing is going. It’s pointing and directing a finger to his corruption.”
And Zambians for Empowerment and Development (ZED) president Dr Fred Mutesa yesterday stated that the stance by the government on the on-going fuel shortages, which have caused chaos in the nation, reveals serious confusion and lack of truthfulness on their part.
“It is irresponsible for the Head of State to say that nobody is to blame for the paralysis in this vital sector of the economy. Does he know how many man-hours have been lost by sleeping on queues at filling stations which could have been spent on more productive things?” Dr Mutesa asked.
And Kanyama regretted that the country lacked institutional mechanisms to respond to serious crises like the one witnessed in the energy sector.
Since the start of the energy crisis about two weeks ago, Konga has been issuing statements assuring the nation that the energy crisis was under control.
But on Monday, Konga told the nation that the country had enough fuel stocks and urged motorists not to panic despite the deteriorating situation which is characterised by long queues both during day and night.
“In oil there are politics involved, key players. Within the political structures, we have who is answerable to who? What are the penalties involved, what are reporting processes? They are not in control of the chain and that is where the problem is,” he said.
Kanyama said the risk profile emanating from the shock in the energy sector was too high to be left to chance and that accountability was paramount.
“It is very important to have a power-risk profile in any given country. Energy has a higher impact on the economy, then copper,” Kanyama said.
“The question is how prepared are we as country to manage that risk? What kind of risk management processes have we put in and you want to look at what is that you cannot control and of course, there should be a process of strong accountability.”
Kanyama also supported Bank of Zambia governor Dr Caleb Fundanga who warned that the current fuel crisis was a threat to the domestic economy and economic fundamentals such as inflation were going to be negatively impacted.
He said without clear signals to solutions, the danger to economic harm was higher than the danger to the reduction of copper prices.
“If the solution is there, it is not communicated to the key stakeholders. It has come out clearly that the minister doesn’t know what is going but all he was told is the fuel is on its way. If it there, it is just lying with one of the players,” said Chibamba.
And the Energy Regulation Board said the strategic reserves of the Oil Marketing Companies (OMCs) have depleted owing to the current acute shortages. ERB acting executive director Lukonde Mfula stated that most OMCs had continued to comply with the regulation requiring them to stock 15 days fuel at any one time to respond to crises like the current one.
Mfula also defended ERB, saying the regulator had been implementing its oversight role, contrary to public perception that the current crisis could have been averted if the OMCs kept the statutory regulated quantity of fuel.
He claimed that most OMCs generally complied with the statutorily requirement on storage reserves and were up to date as at end of August 2009.
Mfula stated that all OMCs were expected to re-establish the 15 days working stock and be fully compliant by end of November 2009. And a check in Livingstone yesterday revealed that only Vuma service station had petrol.
Engen and Kobil only had diesel while Gawula, formerly Caltex Service Station and BP Zambia had completely run out of both diesel and petrol.
On the Copperbelt, the shortage of petrol has continued with long queues forming at service stations where the commodity was being rationed.
On Monday evening, taxi ranks were deserted and many vehicles had camped at different service stations that were either expecting petrol or were rumoured to have petrol.
The few taxis that had petrol and were operating had a field day charging twice the normal fares.
Taxi fares between the city centre and Riverside which were normally between K20,000 and K25,000 had shot up to K40,000 and K50,000 on Monday evening.
Labels: CHIBAMBA KANYAMA, EAZ, ERB, FOOD, HAKAINDE HICHILEMA, RUPIAH BANDA
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‘Proposed monitoring of Zesco is a threat to ERB’
Written by Chiwoyu Sinyangwe
Saturday, July 25, 2009 7:28:51 PM
FINANCE minister Dr Situmbeko Musokotwane’s proposed monitoring criteria for Zesco’s performance threatens the relevance of Energy Regulation Board.
According to the Letter of Intent to International Monetary Fund managing director Dominique Strauss-Kahn, Dr Musokotwane stated that the government wanted to improve the performance of Zesco because it was aware of the current shortage of power and the risk it posed to sustained growth.
“Although the completion of the power station rehabilitation project will restore generating capacity and reduce load shedding temporarily, new capacity is needed to meet increased demand over the medium term.
Policies will be strengthened to ensure that sufficient electricity generation capacity is installed as quickly as possible,” Dr Musokotwane stated “To this end, the government has adopted a new electricity strategy with measures to adjust electricity tariffs to reflect the cost of service; (ii) attract private investments and competition in the sector; increase the operational efficiency of Zesco and strengthen its governance; and ensure that Zesco has sufficient resources to implement the planned rehabilitation and new generation projects.”
Dr Musokotwane stated that specifically, a revised electricity tariff schedule that would raise the average tariff significantly for 2009 would be adopted and a public announcement would be made of the indicative tariff levels for 2010-11 consistent with the policy to reach cost-reflective levels by 2011, with end of last month being put as structural benchmark.
He stated that the announced indicative tariff levels would reflect the cost of the planned large-scale investment in new generation and other electricity structure, and take into account the tariff setting for the mining sector.
Dr Musokotwane told IMF that in order to encourage more private sector participation in electricity generation, the government would submit the necessary legislation to Parliament for the Zambian Grid Code, which would set out rules and procedures for the operation and pricing of the transmission network by end of this year.
“Further, the management of Zesco will, by June 2009, enter into a performance contract with the Government designed to improve the efficiency and corporate governance of Zesco. The contract will stipulate a number of efficiency enhancing and cost cutting measures with the purpose of reducing Zesco’s operational expenditures, including on wages and salaries,” he stated. “It will also require Zesco to submit semi-annual reports on its overall operations to the committee of ministers tasked with implementing the electricity strategy, in order to monitor progress in implementing the agreed cost cutting measures.”
Dr Musokotwane’s approach has unsettled some senior electricity experts within ERB who have called on the government to clearly state the relationship between the ministerial committee and the energy regulator.
“I don’t think ERB is aware of that because it sounds like usurping the powers of ERB. What that basically means is that by taking over the regulatory regime of ERB amounts to passing a vote of thanks,” the source within ERB who asked not to be named said without giving much information on the matter. “But the best approach you can take is that since the announcement came from honourable Musokotwane, protocol does not allow that we comment, so maybe get in touch with honourable Konga, our minister.”
ERB uses the Key Performance Indicators (KPIs) to monitor the performance of Zesco.
The principle behind KPIs, which are intended to address areas of concern such as quality of service and institutional efficiency among others were for Zesco to implement self-enforcing incentives embedded in the electricity tariff structure.
During the last assessment by ERB, Zesco scored 42 per cent in the first quarter, 41 per cent in the second quarter and 51 per cent in the third quarter of 2008 in implementing KPIs.
KPIs were agreed upon between Zesco and ERB in 2007 and the indicators aspect of the evaluation of any consideration for tariff adjustment by the power utility.
And when reached for a comment, Konga said there was need to ensure that Zesco adhered to good corporate governance principles and that the exercise was being done by ERB.
Konga said being a public institution Zesco was supposed to be benchmarked so that the output was as per expectation.
The idea is that ERB is supposed to set the benchmarks regarding the financial, technical and customer performance so that Zesco lives up to the expectations of stakeholders and financiers
Konga who seemed surprised said: “Regrettably, I have not yet seen that letter you are talking about but by and large, there is need to ensure we bring to live and perform to customer expectation and the investor.”
Konga requested Business Post to send him a copy so that he could respond competently and by press time, the minister had not.
Recently, the government announced that it is this year going to borrow on nonconcessional terms US$ 400 million for international financial institutions to enable Zesco deal with the current bottlenecks in the energy sector.
Currently, the government through Zesco is seeking financing to carry out two hydropower investment projects namely the Kariba North Bank Extension and the Itezhi-Tezhi Power Station.
It is understood that Zesco required US $800 million for new projects and rehabilitation of existing infrastructure.
Labels: CORRUPTION, DOMINIQUE STRAUSS-KAHN, ERB, SITUMBEKO MUSOKOTWANE, ZESCO
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‘Proposed monitoring of Zesco is a threat to ERB’
Written by Chiwoyu Sinyangwe
Thursday, July 23, 2009 4:35:38 PM
FINANCE minister Dr Situmbeko Musokotwane’s proposed monitoring criteria for Zesco’s performance threatens the relevance of Energy Regulation Board.
According to the Letter of Intent to International Monetary Fund managing director Dominique Strauss-Kahn, Dr Musokotwane stated that the government wanted to improve the performance of Zesco because it was aware of the current shortage of power and the risk it posed to sustained growth.
“Although the completion of the power station rehabilitation project will restore generating capacity and reduce load shedding temporarily, new capacity is needed to meet increased demand over the medium term. Policies will be strengthened to ensure that sufficient electricity generation capacity is installed as quickly as possible,” Dr Musokotwane stated “To this end, the government has adopted a new electricity strategy with measures to adjust electricity tariffs to reflect the cost of service; (ii) attract private investments and competition in the sector; increase the operational efficiency of Zesco and strengthen its governance; and ensure that Zesco has sufficient resources to implement the planned rehabilitation and new generation projects.”
Dr Musokotwane stated that specifically, a revised electricity tariff schedule that would raise the average tariff significantly for 2009 would be adopted and a public announcement would be made of the indicative tariff levels for 2010-11 consistent with the policy to reach cost-reflective levels by 2011, with end of last month being put as structural benchmark.
He stated that the announced indicative tariff levels would reflect the cost of the planned large-scale investment in new generation and other electricity structure, and take into account the tariff setting for the mining sector.
Dr Musokotwane told IMF that in order to encourage more private sector participation in electricity generation, the government would submit the necessary legislation to Parliament for the Zambian Grid Code, which would set out rules and procedures for the operation and pricing of the transmission network by end of this year.
“Further, the management of Zesco will, by June 2009, enter into a performance contract with the Government designed to improve the efficiency and corporate governance of Zesco. The contract will stipulate a number of efficiency enhancing and cost cutting measures with the purpose of reducing Zesco’s operational expenditures, including on wages and salaries,” he stated.
“It will also require Zesco to submit semi-annual reports on its overall operations to the committee of ministers tasked with implementing the electricity strategy, in order to monitor progress in implementing the agreed cost cutting measures.”
Dr Musokotwane’s approach has unsettled some senior electricity experts within ERB who have called on the government to clearly state the relationship between the ministerial committee and the energy regulator.
“I don’t think ERB is aware of that because it sounds like usurping the powers of ERB. What that basically means is that by taking over the regulatory regime of ERB amounts to passing a vote of thanks,” the source within ERB who asked not to be named said without giving much information on the matter.
“But the best approach you can take is that since the announcement came from honourable Musokotwane, protocol does not allow that we comment, so maybe get in touch with honourable Konga, our minister.”
ERB uses the Key Performance Indicators (KPIs) to monitor the performance of Zesco.
The principle behind KPIs, which are intended to address areas of concern such as quality of service and institutional efficiency among others were for Zesco to implement self-enforcing incentives embedded in the electricity tariff structure.
During the last assessment by ERB, Zesco scored 42 per cent in the first quarter, 41 per cent in the second quarter and 51 per cent in the third quarter of 2008 in implementing KPIs.
KPIs were agreed upon between Zesco and ERB in 2007 and the indicators aspect of the evaluation of any consideration for tariff adjustment by the power utility.
And when reached for a comment, Konga said there was need to ensure that Zesco adhered to good corporate governance principles and that the exercise was being done by ERB.
Konga said being a public institution Zesco was supposed to be benchmarked so that the output was as per expectation.
The idea is that ERB is supposed to set the benchmarks regarding the financial, technical and customer performance so that Zesco lives up to the expectations of stakeholders and financiers
Konga who seemed surprised said: “Regrettably, I have not yet seen that letter you are talking about but by and large, there is need to ensure we bring to live and perform to customer expectation and the investor.”
Konga requested Business Post to send him a copy so that he could respond competently and by press time, the minister had not.
Recently, the government announced that it is this year going to borrow on nonconcessional terms US$ 400 million for international financial institutions to enable Zesco deal with the current bottlenecks in the energy sector.
Currently, the government through Zesco is seeking financing to carry out two hydropower investment projects namely the Kariba North Bank Extension and the Itezhi-Tezhi Power Station.
It is understood that Zesco required US $800 million for new projects and rehabilitation of existing infrastructure.
Labels: CORRUPTION, ERB, SITUMBEKO MUSOKOTWANE, ZESCO
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Zesco proposes increased use of alternative energy sources
Written by Mwila Chansa in Kitwe
Sunday, June 28, 2009 4:35:00 PM
ZESCO has proposed increased use of alternative energy sources to promote competitiveness so as to realise the diversification drive in the economy.
And Energy Regulation Board (ERB) Northern region manager Yohanne Mukabe urged energy consumers not to view messages of reducing consumption as an inconvenience.
Meanwhile, energy deputy minister Allan Mbewe noted that the whole world was now moving towards energy efficient technology to mitigate climate change.
During the official launch of the Energy Conservation Commemoration week at City Square in Kitwe on Friday, Zesco customer services director Teddie Mwale said the power utility recognised the need for other energy sector institutions to play their role.
"Therefore, Zesco encourages the use of alternative sources of energy like renewable energy such as solar, wind and biomass wherever possible. You will agree with me that this spirit of competitiveness will effectively promote the diversification drive in the economy," said Mwale.
He further said concerted efforts were required by all stakeholders to use electricity prudently in order to minimise the undesirable effects of load shedding.
And Mukabe said reducing energy consumption should not be seen as an inconvenience but as one way of reducing bills for customers.
He said the current challenges being faced in the energy sector such as increased demand against low generation capacity of electricity called for behavioural change in energy consumption.
He noted that people in Zambian consumed more electricity than they should.
Meanwhile, Mbewe said those that followed world politics were aware that energy efficiency was one of US President Barack Obama's priorities and that if the US could choose to be prudent in using energy, Zambia had no choice but to follow suit.
And Copperbelt University (CBU) public relations officer Grace Mikunga said the institution was determined to play its role in contributing to energy awareness to industry and commercial enterprises.
Mikunga noted that energy constituted a major component of factors that increased the cost of production whilst reducing profitability.
Labels: ALLAN MBEWE, BIOFUELS, ERB, YOHANNE MUKABE, ZESCO
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Electricity tariff hike will harm environment, says Harrington
Written by George Chellah
Sunday, June 21, 2009 3:22:00 PM
FORMER minister of Environment and Natural Resources William Harrington has observed that increasing electricity tariffs will have a negative impact on the country's environment. And Harrington stated that an increment in power tariffs will be way beyond the reach of the majority of Zambians.
Harrington, who is also a business and investment consultant, made his submissions in an open letter to the Energy Regulations Board (ERB) dated June 19, 2009.
“In the first instance, my commendations to you for conducting public hearings on Zesco’s application to revise electricity tariffs by an average of 66 per cent for all customer categories. It is important and necessary that citizens are consulted over such an important issue,” Harrington stated.
“I had hoped to have the opportunity to address the Board at its hearings but regrettably I was disqualified to do so as I have not made any prior written submission. However, I will make my submission and comments herein, thanks to The Post newspaper.”
He stated that his comments were from the environmental perspective.
“The negative impact of the proposed tariff increment on our environment and climate change... It is common knowledge that deforestation and desertification are amongst Zambia's major environmental problems and challenges today as it has indeed been for several decades now.
“The major cause or contributing factor to this national scourge is poverty and the resultant inability of the majority of Zambians to afford electrical energy for domestic use,” Harrington stated.
“During my privileged tenure as minister responsible for Environment and natural resources in 1995/96, I learnt that poverty in Zambia, as is the case in many developing countries, is both a cause and consequence of environmental degradation. In other words, people are poor because they continue to destroy their environment, and by so doing, they become even poorer.
“The critical point I am attempting to make is that by increasing electricity tariffs, the already high cost of power will be way beyond the reach of the majority of Zambians.
The result will be further destruction of the environment, our precious forest resource, as people will be forced to search for this cheaper and more affordable source of energy.”
He stated that further unsustainable exploitation of the forests would result in desertification.
Desertification is fast encroaching on Zambia. Please go to Southern Province to appreciate what I am talking about. I know because I lived in that part of the country for many years. As far back as 1995, there were no forests within a 30 killometre radius of Lusaka.
The forests have been decimated by charcoal burners,” stated Harrington. “Whilst I appreciate government’s repeated public pronouncements on its ‘commitment’ to environmental protection and implementing programmes to address climate change, these will remain mere rhetoric and misleading if government itself, through Zesco, is going to increase electricity tariffs to the detriment of the environment and disadvantage of present and future generations."
Labels: ENERGY, ERB, WILLIAM HARRINGTON
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Kitwe residents reject Zesco’s proposed tariff hike
Written by Correspondent
Thursday, June 18, 2009 10:52:31 PM
KITWE residents have rejected the proposed 66 per cent electricity tariff hike, describing it untimely and unreasonable. But Zesco Limited director for Customer Services Teddie Mwale has said the intentions to increase tariffs was not to exploit the consumers, but was aimed at making the power sector grow and effectively support economic development.
During an Energy Regulation Board (ERB) organised public hearing on the intentions by Zesco to increase tariffs in Kitwe, Riverside ward councilor Christopher Kang'ombe said Zambians should not be overcharged through electricity tariffs to finance Zesco’s projects.
“It does not mean that if Zesco wants money for maintenance and increased generation capacity, it must overcharge the poor Zambians to finance such huge capital projects. The residents are proposing that instead of Zesco charging high tariffs for purposes of financing their projects, government or Zesco must consider applying for a loan to assist in meeting the various challenges it is facing,” Kang’ombe said. “Furthermore, we feel the amount of money going towards emoluments, allowances and salaries to Zesco employees is enormous and management should review the figures to allow the company save more resources. The submissions we are making here are serious and so Zambians should not be subjected to making these submissions and then ERB proceed to allow Zesco to increase tariffs to 66 per cent.”
And Kang'ombe who spoke on behalf of the Kitwe consumers said Copperbelt had witnessed a lot of job losses in the excess of 10,000 to date and therefore, the suggested 66 per cent was not only untimely, but also unreasonable given the prevailing hardships.
In his submissions to the ERB sitting, Kang’ombe wondered why Zesco should demand more than 16 per cent that it promised to adjust its tariffs when under the multi-year tariff framework adopted by ERB, the electricity utility company was granted increases of 27 per cent (2008), 16 per cent (2009) and 11 per cent (2010).
Meanwhile, Mwale said his company was not interested in exploiting the customers, but wanted to improve service delivery and create a strong customer base.
He said his company played a vital role in the privatization of the mines because of its low tariffs and that it was imperative that it increased its tariffs to effectively cater for the investment and development that the investors had brought in the country.
Labels: ERB, KITWE, TARIFFS, ZESCO
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Zesco remarks on tariff increment unsettle ERB
Written by Chiwoyu Sinyangwe
Friday, April 03, 2009 6:44:27 PM
ENERGY Regulation Board (ERB) is unsettled by Zesco Limited's recent statement blaming the regulator for the current proposed high electricity tariff increase of 66 per cent.
Zesco Limited director for customer services Teddy Mwale blamed ERB for the current proposed tariff adjustment, saying the power utility would have effected a much lower tariff this year had the energy regulator correctly approved previous applications.
Zesco argues that tariffs could have been lower had ERB awarded a higher tariff increase for 2008 under the multi-year tariff framework.
But according to the statement released yesterday and signed for executive director Silvester Hibajene, ERB has since summoned Zesco to appear before it over the statement.
"Zesco Limited has been summoned to appear before the board of the Energy Regulation Board (ERB) tomorrow (today) Friday, 3rd April 2009, following media statements attributed to it regarding the tariff application which is currently under consideration," the statement read in part.
ERB observed that the issuance of public statements by the company on a matter duly before the ERB could be prejudicial to the decision of the board.
"Therefore, Zesco has been summoned in order to safeguard the integrity of the tariff determination process, which lends itself to public consultations before a decision is arrived at," stated ERB.
Labels: ERB, TARIFFS, ZESCO
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ERB denies having approved proposed Zesco tariff raise
Written by Chiwoyu Sinyangwe
Wednesday, April 01, 2009 4:31:32 PM
THE Energy Regulation Board (ERB) yesterday disagreed with energy permanent secretary Peter Mumba’s recent remarks that the regulator has already approved Zesco’s proposed 66 per cent increment in tariffs.
“The ERB categorically states that it has not yet made any decision on Zesco’s application to increase electricity tariffs,” ERB chairperson Sikota Wina refuted in a statement. “Further, in arriving at any decision on the matter, the ERB will proceed in accordance with procedures stipulated in the law. It would therefore be absurd and deceitful for ERB to have already made a decision on the matter and then proceed to invite public comments on the matter.”
Sikota stated that contrary to the statement by Mumba, ERB had not yet agreed to award Zesco Limited’s proposed 66 per cent tariff increase on domestic, industrial and commercial power consumers.
“Members of the public are therefore hereby advised to disregard any reports to the contrary and are encouraged to submit any comments they may have on the proposed tariff increase to ERB [at the regulator’s head office],” he stated.
Sikota maintained that ERB would follow the provisions of the law when effecting Zesco’s proposed 66 per cent increase in electricity tariffs.
Mumba was over the weekend quoted by the state-owned and government controlled Zambia National Broadcasting Corporation (ZNBC) to have said the ERB had already approved Zesco’s proposed tariff increment.
Labels: ERB, ZESCO
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