Power utility rebundling starts
The rebundling of Zesa entities has started following the engagement of a consultant to assess the mechanisms available to restructure the power utility.
This was said by Zesa Holdings executive chairman Dr Sydney Gata when he appeared before the Public Accounts Committee yesterday.
Government unbundled Zesa in 1997 and later in 2006.
The unbundling created five companies namely Powertel Communications, Zimbabwe Electricity Transmission and Distribution Company (ZETDC), Zimbabwe Power Company (ZPC), Zesa Enterprises (Zent) and Zesa Holdings.
Further, Government set up the Rural Electrification Agency (REA) and the Zimbabwe Regulatory Authority (Zera).
Cabinet approved in 2018 the re-bundling of Zesa after realising that its structure was contributing to the increase in costs as executives were getting huge perks and top of the range vehicles.
The exercise is being led by a committee comprising of the Ministry of Energy and Power Development, the Office of the President and Cabinet and the Ministry of Finance and Economic Development.
“Very recently we managed to kick start the process and as of last week we have commenced with the consultant to look at his work plan and he would be deployed for about three months before he hands over a document to Government of what has to be done, how it has to be done and when it has to be done,” he said.
Dr Gata said the unbundling had failed to achieve intended objectives as it had not been wholly implemented.
He said unbundling was meant to attract private capital into Zesa operations.
“Unbundling was never really achieved because as a country we became hesitant to share equity with anyone else. So we had a half-baked product,” he said.
“We had a vertically integrated structure of companies or entities all together there are seven boards today all owned by the same shareholder and regulated the same way. That has promoted a runaway of control, of assets, of operations and of finances to the industry to levels that have never been imagined and this is the root of the chaos that we witness.”
He added that if Government was not prepared to accept private equity then there should be just one organisation that would be easier to supervise and regulate.
Meanwhile, the Committee ordered Dr Gata and his board to return on Monday next week prepared to respond to the 2020 Pricewaterhouse Coopers’ forensic audit report that unearthed numerous irregularities at the utility.-heraldc.l.w
