Sunday, 26 May 2019

WHY I'M DEMANDING $5M FROM CHIVAYO : CHASI


Energy minister Fortune Chasi has told the Zesa board to take urgent action to ensure that controversial businessman Wicknell Chivayo completes the Gwanda solar project or that he repays the $5 million he was given by the struggling utility.

Chasi (FC), who replaced Joram Gumbo on May 15, told Standard senior reporter Obey Manayiti in an exclusive interview that Zimbabweans were justified to be angry over the Chivayo saga.

The businessman’s Intratek Zimbabwe Private Limited was awarded the tender in 2015 to set up the 100-megawatt Gwanda solar plant and was paid $5 million by the Zimbabwe Power Company.

However, the plant is yet to be set up four years later. Chasi said if the board fails to act, there would be a “serious collision”.

He also vowed that the people who owe Zesa huge amounts of money, including Zanu PF bigwigs, would soon be forced to meet their obligations. Below are excerpts from the interview.

OM: How would you describe the new challenges that you face as the recently appointed Energy and Power Development minister?

FC: At the top of my mind is extinguishing fuel queues. This means working together with all stakeholders, including the regulator, to ensure a seamless fuel procurement and distribution system that is properly priced.

Regularity of supply is key for everyone, especially industry and commerce who must plan their production. Second, is ensuring that we do not have load-shedding and that in those circumstances where it is absolutely necessary, it is as brief as possible and that the schedule is dutifully adhered to.

OM: What measures has government put in place to deal with the power shortages, which are threatening the economy?

FC: The regulator, (Zimbabwe Regulatory Authority) Zera, must take charge and execute their mandate as expressed in the law that sets them up, the Energy Regulatory Authority Act [Chapter 13:23] of 2011.
It is mandated to regulate the entire energy sector in Zimbabwe in a fair, transparent, efficient and cost-effective manner for the benefit of the consumers and energy suppliers.
In terms of section 4(1)(a), Zera is required to “regulate the procurement, production, transportation, transmission, distribution, importation and exportation of energy derived from any energy source.”
It is also mandated and required, via section 4 (g), “to maintain and promote effective competition within the energy industry.”

Zera must carry out all 18 aspects of its mandate effectively and independently.
That this is so is self-evident from the content of 4(4), which is very explicit in saying that 4) subject to this Act, the authority shall not, in the lawful exercise of its functions under this Act, be subject to the direction or control of any person or authority.
Zera has not only the legal obligation to ensure a transparent and efficient fuel industry, but it is also insulated from any form of influence or control by “any authority” and that includes myself.

It’s also important to note that my function is limited and confined only to “general policy direction”.

This is made explicitly clear by section 24 (1),which stipulates that: “The minister may give the board such general directions in writing relating to the policy the authority is to observe in the exercise of its functions as the minister considers it to be necessary in the national interest.”

In order to safeguard its operational independence, section 24 (3) goes further to require that:
“When any direction has been given to the board in terms of subsection (1), the board shall ensure that the direction and any views the board has expressed on it are set out in the authority’s annual report.”

I will not interfere with the operations of Zera except to the extent permitted by law. This is very critical for the achievement of a well-functioning fuel industry.

OM: Critics say you were set up for failure considering the fuel and electricity crises that seemed to escalate only a few days after your elevation. What is your reaction to such sentiments?

FC: There are many speculative theories around my appointment. I will not be distracted nor will I give undue attention to them.
I will focus on the supervision of those under my portfolio as well as giving strategic direction to them as contemplated by law.

I will give the regulator “general policy” direction as mandated by government.
I was not aware that I would be appointed. And so I had no time to prepare for the examination that you say I am writing.

However, I consider it an honour to be asked to serve my country at such a critical time and in such an important sector.

OM: A week after your appointment, would you say you underestimated the challenges faced by the ministry coming from outside?

FC: The ministry itself must be innovative. It must originate a power and fuel strategy that speaks to both the short-term and long-term power and fuel needs.
In the power sector, it must ensure that power gets to the people — particularly remote and under-developed parts of our country.
Zesa must be efficient so that its inefficiencies are not loaded into the tariff and thereby onto the consumer.
We must be very deliberate in pursuing the power development side.
Accordingly, my focus will be to drive strategies around renewal energy. We must move in earnest towards these by removing as many consumers as possible from the grid .
The same applies to petroleum. As a country, we must take measures that mitigate against an inefficient supply of fuel.
I expect Zera to develop effective strategies around each and every aspect of its mandate. I have made this very clear to them.

OM: One of the major pronouncements you made soon after your elevation was that Wicknell Chivayo must repay the money he was paid for the Gwanda solar project. Do you still stand by that statement in view of the various court processes around that project?

FC: On the Chivayo case, I have no intention to abdicate the responsibility I have been given by the nation in requiring that Zesa must receive value for money.
I am simply demanding compliance with the provisions of the Public Finance Management Act, which cautions against recklessness with public property and funds.
It would be highly irresponsible of me were I to look askance in the face of a scandal of monumental volumes such as this.

As minister of Energy, I am there to protect and further the public interest in all respects.
Zesa is owed $1,2 billion and that money must be recovered. Zesa imports very expensive power. That $5 million is a lot of money.

It’s either I see the project having been enacted in accordance with the contract or the money itself! I expect that those at Zesa who are complicit in this saga ensure that he pays.
Acquittal on a criminal matter is no bar to civil liability. This type of profligacy will never happen again in this industry as long as I am superintending over it.

The public is right to be angry over this and I’m obviously on their side.
The board must tell me what they have done about this matter. I must, on behalf of the public, be satisfied that sufficient and urgent action is being taken.
In the absence of that, a serious collision is in the offing.

It is improper to ask for tariff hikes in the presence of poor and porous procurement systems, poor risk management and recklessness with public funds.
All these add to the cost build-up with which the public is then lumbered with.

OM: On a regular basis, there are stories in the media of Zanu PF and government-linked officials that are not paying their electricity bills and end up being dragged to the courts. To what extent do you think this has contributed to Zesa’s failure to pay for power imports?

FC: I have been informed that Zesa is owed $1,2 billion. It is senseless to expect it to be viable in the face of such debts.

I have asked Zesa to provide me with an analysis of this debt so that there is clarity on who owes what. I prefer to make evidence-based decisions.

So that analysis is key so that any fact or myth is debunked. The underlying approach is that everyone, whether they are from the party or not, must pay for the service.
I can’t and will not compromise on this. It would be very irresponsible of me to do so. OM: What will your ministry do to ensure that Zesa is protected from powerful people that don’t pay their bills?

FC:I don’t know what powerful people are. Zesa must see customers and not powerful people when they provide service. This is why I insist on boards that don’t buckle and bend at every corner.

On my part, once I have executed my duty, which is to appoint a board that does not consist of my friends or relatives, I will leave them to do the work for which they were appointed. In short, I will protect Zesa by ensuring that there is good corporate governance — not on paper, but in reality.

OM: In light of the inflationary environment weighing down on utilities, has the government considered reviewing Zesa tariffs?

FC: Zesa submitted a request for a tariff increase before my time and it was turned down. There were good reasons for that. I must work with them to ensure that they are efficient in all respects in order to ensure that they are not weighed down by this.

OM: The government has in the past dished out licences to independent power producers, but none of them have come on stream. What are the reasons behind these projects’ failure to take off?

FC: I am not sure what you mean by government having dished out licences.
Upon appointment I asked Zera to supply me with all licences in this respect.
I will examine them and identify non-performing ones on a case- by-case basis, and with due regard to the rules of natural justice, which require administrative action to be taken fairly, I will expect Zera to make decisions.

OM: What happened to the fuel that the government early this year claimed had been paid for by the Reserve Bank of Zimbabwe and would last for two years?

FC: I am not aware of the fuel in question.

OM: Why is that the new measures announced by the Reserve Bank of Zimbabwe on procurement of forex by oil companies have not made a difference in the fuel supply situation?

FC: I am not too sure of the import of the question. But it sounds like a matter on which RBZ is better placed to pronounce itself upon. Standard

0 comments:

Post a Comment