ZESCO is owed K202 billion in unpaid electricity bills by various government departments and quasi-government institutions, the latest Auditor General’s report on parastatal bodies has revealed.
The 2009 report states that failure by management to ensure that it recovered money owed to the company timely resulted in heavy reliance on short-term loans and bank overdrafts.
“As of August 2010, Zesco Limited was owed amounts totalling K202,282,733, 285 in unpaid electricity bills by government departments and various quasi-government institutions,” the report reads in part.
According to the report, Zesco recorded profits during the period under review, but most of its money was locked up in trade and other receivables.
On receivables, the amounts increased to K780,403,000 in 2010 from K768,249,000 in 2007.
“Included in the trade receivables for 2010 is an amount of K301.9 billion, representing 39% of the total receivables which had been outstanding for over 125 days,” the report states.
And the report states that on December 17, 2009, Zesco and Zamtel signed an Indefeasible Right of Use (IRU) agreement that transferred control of all the fibre business and infrastructure to Zamtel.
The IRU agreement provides that Zesco and Zamtel revenue sharing ratio shall be 20% to 80% respectively.
“The agreement also committed Zesco to expanding the network and thereafter transferring the network to Zamtel,” the report says.
In this regard, on July 30, 2010, the power utility company contracted ZTE Corporation of China to extend the current fibre length by 3, 000 kilometres at a contract price of US$43, 900,000.
However, there were no revenue projections on which the revenue sharing ratio was to be based, thereby making it difficult to ascertain how much Zesco was going to realise to enable it service its loans obtained for the first and second phase of the project.
In response to the audit queries, Zesco management stated that the company would engage stakeholders on the possibility to re-negotiate the IRU with Zamtel considering that the telecommunication company’s assets are now in the hands of new owners (Lap Green).
[Zambia Daily Mail]
Why did they not cut power, i thought no one is above the law
Why then bother us innocent customers that are up to date with our bills by subjecting us to unnecessary load shedding when there are others owing you billions and still connected? crack the whip and disconnect all of them then spare us your inconveniencing load shedding
ZESCO….my ass…..stupid power provider..
analyst ***** zesco is a partially govt owned thats my president fired the board.
ZESCO is too inefficient and needs to be unbundled into the three: Generation, Transmission and Distribution, and retail. Power generation should be spun off to an independent entity and this market should also be opened up for other private players as well whereas ZESCO should solely focus on Transmission and Distribution. Selling of power to customers should also be a separate entity and this sector should also be opened up for other private players. This in the end will make ZESCO profitable as they will be charging the generator to pass power through their network and also selling the power to the Retailers. In the end the end consumer will have a choice of which power retailer they will subscribe to and buy power from thus making this sector competitive and benefiting the consumer.
You will cry your mother when ZESCO is unbundled and private operators are allowed to market electricity. Appreciate what you have. No point being a smart ass.
(In response to the audit queries, Zesco management stated that the company would engage stakeholders on the possibility to re-negotiate the IRU with Zamtel considering that the telecommunication company’s assets are now in the hands of new owners (Lap Green)……………………….& what the hell where they thinking only last year when they were negotiating.
anything the govt has a hand in is crap, Zesco, Police, ERB coz govt. Let the govt leave companies run independently like Nakambala suger company. coz what do u expect zesco or police to do when they refuse govt directive? i know we r thied world countries and we think police cant be independent its not rocket science its working in developed countries.
And want to repossess zamtel so that u don’t pay bills like before as shown here with Zesco ?
Ba Zesco tupuba. They dont have a debt collection dept.? How do you let people owe so much money and you still give them electricity?
How much is State house owe ZESCO?
Drama Continues to unfold! this will never end! How does Zesco operate with such huge sums of debt? How come a
lot of qualified Accountants allowed this mess to go on and on???
… I think Zesco should be partially privatised like Zanaco and (yes!) Zamtel. We just need to be sure that GRZ holds a 45% to 55% share in the company. That will make it profitable.
Can Zesco at least tell me where the 3pins I’ve been paying for the last 10 years gone.
The problem is not Zesco, but Govt. All parastatals fail for one reason – govt interfers and fails to pay what they owe them. If you insist, you lose your job.
As for the audit report, Iam sure Zesco management is smarter than what is being alleged here. It will be good to hear from someone close to the situation e.g an employee or management themself.
@4 Realist Magaza. I agree with you on the restructuring of the electricity market. Here is how we should proceed. Break Zesco into three separate companies.
1. Kariba Energy. This company should run all the Zesco generation facilities at Kariba, Kafue and Victoria falls etc. Kariba Energy should be a wholesaler 2. ZamGrid. This will be a bulk transmission carrier responsible for the running and devt of transmission lines in the country. I propose that the Copperbelt and Zesco lines should be merged as one company called ZamGrid. 3. Zesco should be transformed into a customer supply company only as the name suggests. 4. Copperbelt Energy should also be allowed to compete with Zesco in the supply of electricity.
Zesco Management has their hands tied, This is a profitable company which has been vandalized and mismanaged by the Politicians.The giving of the fiber optic asset to Zamtel by the Govt was illegal and criminal done in bad faith not on behalf of the people but the people in power then to enrich themselves the Bandas,Siliyas and Liatos
i hope de amount in question has bn verified, coz i hav an account which had a duplicated billing but has not bn rectified 4 de last 5 mths despite several assurances dat it wud rsolved
:((:o:o:o am seriously shocked by this report!!!!! pliz President SATA use your executive muscle to rescind the fiber optic transaction from Zamtel back to ZESCO. accordingly thorough investigations to be instituted in the management of ZESCO and its deals. thank God for saving us from MMD (Movement for Money Dealers), why shud we be suffering through Load sheddings for the sins of politicians how do u expect ZESCO to survive if you don’t pay your bills K202billion!!!!!! = USD40million **==[-x