ZESCO Faces Challenges Amid Workforce Exodus, Power Deficit, and Alleged Scandal

ZESCO Faces Challenges Amid Workforce Exodus, Power Deficit, and Alleged Scandal

ZESCO, Zambia’s national electricity utility, is currently navigating a turbulent period marked by internal unrest, an impending power deficit, and allegations of corruption. The company’s decision to freeze the resignation of its engineers, coupled with the challenges posed by low water levels at Kariba Dam, is exacerbating an already strained situation. Compounding these operational issues are reports circulating on social media and in some news outlets that allege a possible $35 million corruption scandal involving a deal with Petrodex Trading, a Dubai-based firm. Although these allegations remain unconfirmed, the potential implications for ZESCO and Zambia’s fight against corruption could be significant if proven true.

Engineer Exodus and Leadership Challenges

Tension within ZESCO has been simmering for months, largely due to deteriorating working conditions. On September 16, 2024, ZESCO issued a directive halting all mutual separation requests from its engineers. This decision has sparked frustration among employees, who view it as an attempt to prevent a mass exodus of key staff. Engineers, in particular, have cited poor compensation, lack of career growth opportunities, and a toxic work environment as their reasons for seeking employment elsewhere. Some workers have even called for the replacement of top management and board members whom they hold responsible for perpetuating a culture of inefficiency and stagnation.

For years, ZESCO has faced criticism for its inability to modernize operations and invest in cutting-edge technologies. The halt in resignations has led to speculation that the company is struggling to retain the technical talent necessary to keep the national grid operational. With many engineers reportedly dissatisfied, the freeze is seen as a desperate move by management to prevent further deterioration of ZESCO’s infrastructure and service delivery.

Power Deficit and Energy Crisis Looming

ZESCO’s internal disarray comes at a time when the utility is also grappling with a significant reduction in power generation capacity. Low water levels at the Kariba Dam, which provides a substantial portion of Zambia’s hydroelectric power, are expected to lead to a power shortage that will last through September and October 2024. With emergency power rationing likely on the horizon, ZESCO has urged consumers to conserve electricity, particularly during peak periods.

Additionally, ZESCO announced on September 17, 2024, that one of the two units at Maamba Collieries, a key independent power producer, had been successfully restored after routine maintenance. However, the second unit has now been taken offline for scheduled maintenance, which will result in a 150MW reduction in the national grid for the next 15 days. This temporary loss will further strain the grid, compounding the effects of reduced capacity from the Kariba Dam.

Despite efforts to import 200MW of power to mitigate the impact of these shortages, ZESCO acknowledges that the nation will still face power rationing. The potential shutdown of the Kariba North Bank Power Station, should water levels continue to drop, looms large over the company and the country’s energy security.

Allegations Surrounding Petrodex Trading Deal

As if the operational challenges were not enough, ZESCO now finds itself embroiled in controversy surrounding a reported $35 million deal with Petrodex Trading, a Dubai-based company. Unconfirmed reports on social media and some news outlets allege that ZESCO made an advance payment to Petrodex for the supply of 90MW of power to the Democratic Republic of Congo (DRC), in addition to a previously contracted 30MW. These allegations have sparked outrage, with Zambia’s Attorney General and national security officials reportedly opposing the deal due to legal irregularities.

Petrodex Trading’s owner, Rami Ghaziri, has been implicated in various legal issues in the past, further fueling skepticism about the legitimacy of the agreement. Critics argue that if the allegations are true, the deal could undermine Zambia’s efforts to combat corruption, especially given the government’s emphasis on transparency and accountability. The advance payment, reportedly made without proper legal clearances, has become a focal point in the broader discussion about corruption in Zambia’s energy sector.

However, it is important to note that these allegations remain unconfirmed. Neither ZESCO nor Petrodex Trading has publicly commented on the specifics of the deal, leaving room for speculation. If the allegations prove false, the situation could instead highlight the dangers of misinformation and the need for clearer communication between ZESCO and the public. On the other hand, if the allegations are confirmed, the scandal could have far-reaching implications for ZESCO’s leadership and Zambia’s broader anti-corruption drive.

Potential Impacts if Allegations Are True

If the Petrodex deal is indeed found to be fraudulent, the repercussions for ZESCO and the Zambian government could be severe. The scandal would likely erode public trust in ZESCO, which is already struggling with its reputation due to power shortages and internal disputes. Additionally, the controversy could have a chilling effect on foreign investment in Zambia’s energy sector, as investors may become wary of engaging in a market perceived to be vulnerable to corruption.

More broadly, the scandal could damage the credibility of President Hakainde Hichilema’s administration, which has made anti-corruption a central tenet of its governance strategy. The involvement of national security officials and the Attorney General in opposing the deal suggests that the issue is being taken seriously at the highest levels of government. If the deal is proven to be illegal, it could lead to widespread calls for accountability, including the potential dismissal of key figures within ZESCO and government oversight bodies.

The Path Forward for ZESCO

As ZESCO grapples with these internal and external challenges, it is essential that the company looks for long-term solutions to ensure energy security in Zambia. Hydropower, while historically significant for Zambia’s energy production, is no longer sustainable as the sole solution due to the recurring impacts of drought and low water levels. According to an article published in Lusaka Times titled Addressing Zambia’s Energy Crisis: Moving Beyond Hydropower Dependency, it is critical for Zambia to diversify its energy sources, moving toward solar, wind, and other renewable energy technologies to reduce reliance on hydropower. The author of the article emphasizes that while hydropower has served Zambia well, diversification is key to ensuring the country’s long-term energy security and avoiding future power crises.

For ZESCO, this means investing in alternative energy projects and exploring partnerships with independent power producers to bring more reliable sources of energy to the grid. By reducing its dependency on a single energy source, ZESCO can not only address its immediate energy deficit but also build resilience against future climate-related disruptions.

Internally, ZESCO must address the growing dissatisfaction among its workforce, particularly engineers, who are essential to maintaining the country’s power infrastructure. Leadership changes may be necessary to restore confidence in ZESCO’s ability to manage its operations effectively and to create a more positive work environment for its employees.

Externally, ZESCO will need to find solutions to the impending power crisis, whether through increased imports, renewable energy investments, or improved water management at key dams like Kariba. The corporation’s ability to navigate this power shortage while maintaining public trust will be crucial in determining its long-term viability.

The outcome of the Petrodex Trading controversy will also be pivotal. If the allegations are proven false, ZESCO will need to engage in more transparent communication to rebuild its reputation and reassure the public and investors. Conversely, if the allegations are true, ZESCO’s leadership will need to take swift action to address the corruption within its ranks and to cooperate fully with any legal investigations.

ZESCO is facing a perfect storm of challenges. The company’s ability to overcome these obstacles will depend largely on how its leadership handles both the internal unrest and the external crises at hand. Whether ZESCO emerges from this period stronger or succumbs to its challenges will have significant implications for Zambia’s energy security and broader economic development.

By Moses H. Simwakaka