THE Zimbabwe Electricity Transmission and Distribution Company (ZETDC) is technically insolvent and owes more than $1 billion, which is more than the amount it is owed, managing director Julian Chinembiri said yesterday.
The company is owed close to $1bn and has taken some defaulters to court.
Speaking at a breakfast meeting in Harare yesterday, Chinembiri said the company required a bailout from government.
He said the mining sector owed ZETDC ($52 million), industry ($210m), commercial sector ($436m), domestic sector ($294m) and farming community ($84m).
“I think there was a debt write-off for farmers, but you can see where they are now. It has to do with what happened in 2009 when we dollarised. So what happened in 2009, our revenues were zero, but we consumed the United States dollar debt from Mozambique’s Hydro Cahora Bassa (HCB) and other suppliers.
“. . . what is peculiar about the domestic debt is why we put a lot of prepaid meters. To us, we are not caring much on the domestic, because that debt, we are collecting it, although the rate is a bit slow. That’s why we have now increased it to 50%. The money we are raising from the prepaid meters is what we are using to run the company at the moment,” Chinembiri said.
He said the company had accumulated $8,8m, which was supposed to be paid on a prepayment and is getting half of the 100 megawatts it was supposed to get from HCB as it has accumulated arrears.
“Due to the impact of not awarding a tariff, as we speak, we are fighting on a daily basis with our colleagues in Eskom [South Africa] because we have accumulated interest of $8,8m. It was supposed to be paid on a prepayment, so it’s a challenge,” he said.
Chinembiri said power purchase debts had accumulated to $734m that included internal and external suppliers.
He said the Zimbabwe Power Company (ZPC) owed more than $700m to suppliers who require payments upfront. ZPC is a power generation arm of Zesa Holdings.
ZETDC requires $20m for maintenance of substation and $12m for repairs and maintenance on the distribution network among others, he said, adding that ZETDC was projecting a loss of $189m due to the non-reflective power tariff.
He said 63% of the revenue goes to power purchases which was a misnomer.