HomeBusiness DigestGono declares truce with Zesa

Gono declares truce with Zesa

Shakeman Mugari

RESERVE Bank of Zimbabwe governor Gideon Gono has declared a truce with the Zimbabwe Electricity Supply Authority (Zesa) Holdings which reacted angrily to his allegations of mismanagement and sought to give an uncomplimentary presentation to cabinet indict

ing him, sources said this week.

Businessdigest is informed that Gono, who blocked a cabinet-sanctioned tariff increase by Zesa, saying the group was top-heavy, mismanaged and wanted customers to pay for its bloated salaries bill, had invited Zesa for talks over tariff increases.

The sources said this week Gono’s overtures to Zesa could end a four-month battle that was dragging in members of President Mugabe’ cabinet in a verbal war.

Gono was understood to be seeking to iron out his differences with the Zesa Holdings board and its management.
Gono had earlier blocked Zesa’s tariff review proposal to cabinet arguing that they would militate against his war on inflation.

A source said the central bank wrote a letter to Zesa  last week inviting them to an urgent meeting to discuss the tariff problem.

The central bank also invited the Zimbabwe Electricity Regulatory Commission, a statutory board which regulates the power industry, to be part of the talks.

The talks started on Friday with the parties agreeing to form a committee to discuss their differences on tariff increases.

A source who attended the meeting said the committee would be made up of representatives from the three organisations.

“We met on Friday to discuss the sticking issues. Basically it was to iron out our differences,” said the source.

Businessdigest understands that the committee would be made up of four representatives from each organisation.

“We agreed the findings of the committee would feed into a joint proposal to cabinet,” said the source.

The committee has also been tasked to find a compromise between the RBZ and Zesa positions.

The findings would be presented once they were complete.

In his presentation to cabinet which culminated in the obstruction of the tariff increases which they had initially agreed to, Gono censured  Zesa for making consumers pay for its inefficiency.

He accused Zesa of misleading cabinet into awarding it a tariff review, saying tariff increases were meant to fund Zesa’s bloated wage bill which had been caused by the “superstructure” created by its unbundling.

Cabinet then dismissed Zesa’s proposals for tariff increases on the basis of Gono’s presentation, prompting a fierce brawl in which Zesa management made counter accusations against Gono, alleging he was ill-informed about the utility’s operations. 

Zesa demanded an audience with cabinet and two weeks ago made strong representations to Vice-President Joice Mujuru against Gono, sources indicated.

They said Gono had misled cabinet into making the decision barring Zesa from reviewing its tariffs.

They said the governor had failed to appreciate the operations of the power industry and used uninformed arguments to block their proposal. 

The sources said Gono had sought dialogue with Zesa in an effort to avoid embarrassing exposures to cabinet.

A source said after Zesa’s presentation to Mujuru two weeks ago, the central bank had started making overtures to iron out its differences with the power utility.

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