HomeBusiness DigestZim’s Utility Rates and Tariffs ‘excessive’

Zim’s Utility Rates and Tariffs ‘excessive’

PARASTATALS, local authorities and other utility organisations have been advised to charge rates and tariffs that are in line with the region to avoid overcharging customers.

Speaking at a function hosted by Habakkuk Trust, Deputy Prime Minister Arthur Mutambara and the business community said rates and tariffs being charged by utilities and local authorities were beyond the reach of most Zimbabweans.

“Whatever is done with the tariffs, they must be the average or even lower than what is being charged in the Sadc region and not anything above,” Mutambara said. “Sovereignty is not in ownership but in the service delivery aspect.”

Analyst Eric Bloch said while the economic environment was improving, the same cannot be said of public service providers.

Consumer Council of Zimbabwe Bulawayo regional manager Comfort Muchekeza said service charges were not in line with the package being provided.

“Zimbabweans need to adopt a single currency to avoid pricing distortions and fluctuations,” Muchekeza said.

“Let us charge what is equivalent to what other regional countries are charging considering that we are using their currency,” he said.

While rates and tariffs of basic services continue to go up, consumers have increasingly felt the pinch in their pockets.

Bloch said TelOne, the sole fixed telephone service provider, was charging three times more than what Telkom in South Africa were charging.

An official from TelOne admitted that they had failed to maintain appropriate levels of services in some areas due to constraints such as the unavailability of foreign currency.

“It has been a problem; we do not have companies in Zimbabwe that manufacture telecommunications equipment. Most of our equipment has to be imported and due foreign currency shortages it has been difficult to maintain what is already in existence let alone put up new equipment,” the official said.

TelOne has been accused of sending customers unreasonably high bills. Bloch said customers were getting high bills at times unrelated to actual calls made and being inconvenienced by peremptory disconnections of service.

Customers have also had to face astronomical electricity charges with Zesa charging seven times what Eskom, the power company of South Africa, is charging.

“Zesa’s tariffs vastly exceed those prevailing elsewhere in the region and for several months it has been directed by the government to revise such tariffs downwards to realistic levels with retrospective effect,” Bloch said.

“Until it does so, and the revised tariffs published, consumers cannot even compute their liability by self reading of meters,” he said.

Zimbabwe Congress of Trade Union (ZCTU) regional chairperson Reason Ngwenya said parastatals had gone far beyond what the general worker can afford.

“We still have to fight corruption because it is still in existence, it must stop, that is our perspective as labour,” Ngwenya said.

“Those in authority should let market forces take their course and allow the rule of law to prevail; they cannot charge residents astronomical rates, where do they expect them to get the money from looking at the allowances that most civil servants are getting?” he said.

Consumers have accused the new government of not doing anything about protecting residents from the unrealistic rates.

The Bulawayo City Council was this week forced to revise its budget from $416 million to $303 million after more than 3 000 people signed a petition rejecting the $416 million proposed by the city fathers.

In the latest tariffs schedule, the least paying household in the high-density suburbs will be paying $18, down from $20.

According to Bloch local business property rates are five times higher than what was being paid in South Africa.

“Even if they cut by 50%, it will still be more than the regional price,” Bloch said. “In a way, this stimulates brain drain. These excessive tariffs are a hindrance to economic growth.”

The city of Harare recently announced a reduction in its municipal charges by 50%, a move that has been described as a positive step in cushioning residents against exorbitant charges.

However, the chief executive of Habakkuk Trust, Dumisani Nkomo said tariffs were still way above what local authorities in the region were charging.


Recent Posts

Stories you will enjoy

Recommended reading