ZESA won’t survive: Mangoma

ZESA Holdings will collapse if Zanu (PF) cancels debts owed by its clients, according to the outgoing Energy and Power Development Minister Elton Mangoma.

Mangoma
Mangoma

Mangoma told The Zimbabwean that the calls did not make business sense.

Vice President Joice Mujuru recently announced that her party would scrap electricity bills that have accumulated since the hyper-inflationary era.

“Unless ZESA gets paid for services rendered, it will collapse,” Mangoma said.

He added that ZESA’s current tariff levels were not profitable.

“Right now they are running a breakeven tariff regime. If these plans are carried out, the reliability of electricity supply will go away,” he said.

While in office, Mangoma pushed for the introduction of prepaid meters, mainly to benefit the poor.

“The accrued debts were factored into that system. If there are any disruptions to electricity supply, it is the poor in high density areas who will suffer. It costs more to buy firewood than electricity,” he said.

Mangoma said the cancellation of debts was designed to benefit the rich and powerful.

“We want to know who is going to benefit, the ordinary person in the high density areas or the big guys who want their debts written off,” he said.

Over 280,000 prepaid meters were installed countrywide. According to Mangoma, ZESA is currently owed in excess of $600 million.

Harare recently complied with Local Government Minister Ignatius Chombo’s directive to write off outstanding debts of ratepayers for rentals, licenses, refuse charges, levies and rates from February 2009 to June 30, 2013.

Masvingo scrapped close to $12 million owed by its residents.

The city of Harare recently told residents to start paying their bills on time to allow effective service delivery.

Outgoing Finance Minister Tendai Biti has said banks will be hit hard by the debt cancellation because of loans made out to local authorities.

Post published in: Business

Leave a Reply

Your email address will not be published. Required fields are marked *