ZESCO BOARD CHAIRPERSON RESPONDS TO THE CONSENT AGREEMENT RAISED BY EMMANUEL MWAMBA
ZESCO Board Chairperson, Vickson Ncube wrote,
Emmanuel Mwamba I am compelled to respond to this particular matter as I have all the facts and figures that are involved in the consent judgement.
The background to the matter is that in 2014 the ERB gave a directive for an increase of tariffs ZESCO Limited charges mining houses. The mining houses were unhappy with this directive on two scores.
Firstly it disregarded all existing contracts between ZESCO Limited and mining houses contained in the Bulk Supply Agreement (BSA) and Power Purchase Agreement (PPA). Secondly, tariff increases are triggered by a process that begins with an application from ZESCO Limited submitted to ERB.
The ERB sets in motion a progress that starts with a call for a public submissions, followed by public hearings. Based on this process ERB will approve, amend or reject the ZESCO Limited application. In this particular case, ERB announced an increase without due process.
The existing legal framework did not support this directive. ZESCO Limited started raising invoices to the mining house based on the directive.
Mining houses continued paying ZESCO Limited based on existing contractual provisions.
In 2016 an increase of tariff to the mining houses was effected following due process. No mining house rejected the new increase. They have been paying the tariff since 2016.
The amount that is the subject of the out of Court Settlement is the invoices between 2014 and 2016 to the extent of the difference between contracted tariff and the ERB directive.
I have always wondered why responsible members of society find it difficult to obtain facts that are public available before publishing stories. The handlers of this page can easily contact ZESCO Limited for the full facts.
I have always stated that ZESCO Limited belongs to us all as Zambians and those of us charged with the responsibility of overseeing its affairs will do so with uttermost honest, integrity and due care.
BELOW WAS AMB.EMMANUEL MWAMBA’S ARTICLE
ZESCO MADE TO LOSE $1BILLION
In 2014, ZESCO obtained approval from the Energy Regulation Board (ERB) to increase electricity tariffs for the mine companies to 28 percent under the bulk supply agreement.
Another increment for the mine houses was made in 2016.
Lumwana, Kansanshi, Lubambe, Mopani, Chibuluma, NFC Africa and Chambeshi Metals challenged ERB, ZESCO and CEC for increasing tarrifs despite the bulk agreements made between ZESCO and CEC.
They obtained an injunction and did not need to pay the electricity bills at new rates since 2014 to allow the court to provide a judicial review of ERB and ZESCO’s decision.
It has now been announced that ERB, ZESCO and CEC have entered into a Consent Judgment with the seven mining companies which discharges their obligations to pay the invoices of the new electricity tariff effected in 2014.
So the contingent liabilities by the mining companies estimated at over $1billion will not be paid to ZESCO!
The mining companies consume over 50% of power generated by ZESCO.