BULAWAYO Prices of locally manufactured goods are set to rise due to the excessive power cuts that are affecting production, business leaders have warned. (Pictured: Welshman Ncube)
This is coming at a time when the power utility, the Zimbabwe Electricity Supply Authority (ZESA) announced on Friday that more power outages were coming due to a maintenance work on the Kariba Power Station.
The excessive power cuts are negatively impacting on capacity utilization as companies are now forced to buy generators that are more expensive than electricity and this in turn will push prices of products upwards, the president of the Zimbabwe National Chamber of Commerce (ZNCC), Obert Sibanda said.
Industry is already experiencing prolonged power outages and that will increase the prices of local goods, as compared to imported goods, he said.
The extended power load-shedding programme has been attributed to a power shortfall due to generation problems at Hwange Power Station.
Due to the power outages, some companies are reported to be producing lower than 10 percent of their required capacity because of the power outages.
The Minister of Industry and Commerce, Professor Welshman Ncube said: Power outages have affected industry badly, the equipment has been damaged, production has been low and costs of it have been extremely high. We are aware that it is one of the major threats to industry and the growth of our economy.
He said his Ministry had tabled their concerns to the Ministry of Energy and Power Development, which has assured them that in the last half of this year the country might be having sufficient power to ensure that there are no power cuts to industry.
The Kariba plant will be under-going a maintenance programme and as a result we will have a reduced output from Kariba power station and all this is in preparation of the World Cup, ZESA spokesman Fullard Gwasira told Radio VOP. The maintenance programme will be done starting on April 16 and ending of May 21.
Gwasira said the maintenance is done in preparation for the June, Soccer World Cup in South Africa .
ZESA is understood to be in need of US$383 million to import power and improve electricity generation amid reports that the utility is owed US$347 million in unpaid bills. The debt has ballooned from US$230 million reported last year.
In 2008 ZESA entered into a US$15 million deal with ZIMASCO a local mining firm to refurbish Hwange Power Station unit number five and six.
At the same time when Zimbabwean households and industry are experiencing persistent power cuts of up to 20 hours daily, Zimbabwe is exporting power to Namibia at a discounted tariff to meet requirements of a US$50 million deal which has worsened the power crisis.
Under the deal signed in March 2007, Namibia , which provided Zimbabwe with loan of US$50 million, is supposed to receive 180 megawatts for a minimum of five years as part of a power purchasing agreement between Zesa and Namibia s power utility, Nampower.
The US$50 million was meant to refurbish and expand Hwange Power Station to levels that would have resulted in a significant reduction in power-cuts throughout energy-crisis-hit Zimbabwe.
Post published in: Economy