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Zesa being run like Dynamos Football Club

I WISH to congratulate the RBZ governor for hitting the nail on the head on the issue of parastatals. I however disagree with the allocation of an unearned $10 trillion to these organisations.



Arial, Helvetica, sans-serif”>For a start, they have a potential to earn their own money provided two things are put in place.


Firstly, competent management should run these organisations and, secondly, they should be allowed to charge cost-reflective tariffs for their services. These two issues are key business fundamentals that are critical for the success of any business.


In the case of Zesa the governor has refused the implementation of a much-needed cost-reflective tariff structure on the basis that it would make his inflation targets unachievable. While I support the governor’s refusal, I disagree with the reason he gives.


It does not make sense to achieve the inflation target on the back of artificial and unsustainable low prices of electricity. The reason for his refusal should rather be based on the poor quality of management and lack of corporate governance at Zesa.


The organisation is being run, at best, like Dynamos Football Club, with the state of accounts resembling that of a drug addict. The two key business fundamentals are not in place, and the situation is made worse by the absence of a board.


Even though a new board was recently appointed 18 months after the dismissal of the previous one, it has never met and the executive chairman, who doesn’t like the board, has sworn that no meeting will take place.


July Moyo’s current political predicament renders him unable to control the executive chairman who is seriously abusing his relationship with the president, albeit unknown to His Excellency.


Against this background, it is inadvisable to give $1 trillion to Zesa or to approve new tariffs until the restoration of good corporate governance and management there. To award a tariff increase without good management and corporate governance in place would amount to giving more money to the drug addict.


Gono should know that the issue of corporate governance is so pervasive and not limited to the financial sector alone. He can replicate the same model on many enterprises and yield equally stunning results. He would be surprised by what he will unearth in the public sector, particularly in Zesa, if similar investigations to what were done in the financial sector were undertaken.


The level of corruption is so serious but the whole thing has been successfully covered under the veneer of rural electrification. Lately, a new veneer has been presented to management under the “Look East Policy”. Big negotiated power deals are being corruptly crafted and signed with Chinese, Indian and Iranian companies.


The unbundling of Zesa that was supposed to yield enormous efficiencies has been hijacked. The major outcome of the exercise is the reincarnation of Zesa, in its worst form, with the establishment of a holding company that is adding more cost than value. The business has completely lost focus and electricity revenue is being channelled to fund non-core operations such as tobacco and a badly conceived rural electrification programme.


The Zimbabwe Electricity Regulatory Commission, set up to oversee this critical industry, has been staffed by the wrong people with little or no knowledge of the industry.


Dr Gono, please deliver us from this evil!


George Tambaoga,

Harare.

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