ZESCO headed for unbundling but…

UNBUNDLING ZESCO into three entities as suggested by the PF government will become three times more expensive to manage and less efficient as it will demand more resources which is not good for an economy like Zambias, says the Private Sector Development Association (PSDA).

The Patriotic Front (PF) in their 2016-2019 manifesto plans to unbundle the electricity industry into generation, distribution and customer service to improve efficiency.

It, however, states that the transmission part would still remain under the Government’s jurisdiction.

The PF also plans to commence the revision of the electricity tariff with a view to arriving at a cost reflective tariff to exploit the potential and attract independent power producers (IPPs) invest in power generation.

But PSDA chairperson Yusuf Dodia said his association was against unbundling ZESCO as it would be costly for Government.

“I am not for the idea of unbundling Zesco because that will be running away from addressing the real problem which is putting a more efficient management in ZESCO.

“Over and beyond that, unbundling it into three entities means we are creating three administrations, so then the energy sector will become three times more expensive to manage,” he said.

Mr Dodia also said ZESCO would become less efficient once unbundled as the three entities would blame each other when things went wrong.

“My opinion is that ZESCO as an entity at the moment means generation, transmission and distribution and therefore, whenever this value chain fails, ZESCO takes full responsibility.

“Now if we unbundle it, one will be blaming another one. We are likely to have a blame game where each one will be blaming each one,” he said,

He further said ZESCO would lose its collective power of borrowing funds for energy projects once unbundled as there would be three separate entities with different management.

“The possibility of each one of the entities growing becomes a problem because they do not have the collective strength that ZESCO has today in terms of borrowing power,” he said.

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