Calls to make public and disclose the tariffs that have been agreed for the new Bulk Supply Agreement – BSA between ZESCO and Copperbelt Energy Corporation – CEC that has been given a go ahead by the Energy Regulation Board – ERB risk being frustrated.
Despite ZESCO who are state owned and a public institution generating the power and facing financial difficulties due to a history of entering into deals that are suboptimal and inimical to its long term interest, the power utility under the new management is set to repeat the same mistakes of the past.
The last BSA between the two companies that expired on 31 March 2020 was not renewed after ZESCO management revealed that the long term agreement had been a drain as CEC had contracted to purchase power at knock down rates below ZESCO cost of production while it was reselling the power to the mines at supernormal profits.
And efforts by the Zambian Business Times – ZBT to find out if the new BSA contract would be made public are indicating that the new ZESCO management and CEC management are determined to keep the document secrete, a scenario that has led to speculation that the contents may raise public anger.
An internal source who spoke to ZBT but requested to remain anonymous revealed that the contract shall not be shared to the public, stating that it is confidential between the two parties. This is despite the fact that the power being bought is from a public or state owned utility.
The source further said in the case of the BSA, there is the Electricity Act which mandate that the document is shared with the Energy Regulation Board for review and approval, but beyond that, there is no obligation on the part of the two parties [ZESCO and CEC] to share the document with other key stakeholders or to members of the public, the source said.
“If the details of the document were to be shared with the public, it would be the decision between ZESCO and CEC, but if not, this contract is not supposed to be shared as its strictly confidential” stated the source.
Further efforts by ZBT to speak to senior ZESCO staff to get assurance that the contract is in the best interest of the general public and that CEC has not yet again obtained a deal that is good for them and adverse to ZESCO proved futile as the document and tariffs therein have not been shared even internally with most senior staff members.
New ZESCO Managing Director Victor Mapani has been challenged to make the agreement public as ZESCO is a public institution whose dealings should be above board. Already, ZESCO has no publicly available audited financial statements, with indications that they are behind by over five years.
The mere fact that ZESCO is opting to keep this agreement secrete raises further suspicion as to weather this deal is above board. Good corporate governance demands that this agreement be made public owing to the revelations that this deal was partly responsible for the financial troubles ZESCO has been going through over the past years.
The CEC and ZESCO previous expired BSA bulk supply agreement brought a lot of public discussions among the citizenry with allegtions from the ZESCO management that CEC was a mere Middleman company that was merely profiteering and sucking value out of ZESCO’s power generation.
It was argued that CEC should have just been paid wheeling charges for use of their infrastructure to transport power leaving ZESCO to directly negotiate tariffs with end users. ZESCO reporter that they already supplied power to North – Western Province based mines at more profitable rates and were losing money on power supplied the Copperbelt base mines and customers through CEC.
