BY TAFADZWA MHLANGA
The government has suspended for two years customs and excise duty on spares and equipment imported by the Zimbabwe Electricity Supply Authority (Zesa) in a move that is set to bring relief to the struggling power utility.
Zesa, which is choking under the weight of huge foreign debts, has been failing to maintain most of its ageing thermal power stations at a time the country’s main source of power — the Kariba Hydro Power Station — is operating at a third of its installed capacity due to a severe drought.
According to the latest government gazette, Finance minister Mthuli Ncube suspended duty for “power equipment, critical spares and transformer components imported by Zesa for a period of two years with the effect from June 1, 2019.”
Zesa subsidiaries that will benefit from the duty waiver are Zesa Enterprises, Zimbabwe Electricity Transmission and Distribution company (Zedtc) and the Zimbabwe Power Company.
Some of the power equipment covered under the duty waiver includes electricity meters, liquid meters, signal generators, fuses, motor control panels, overhead travelling cranes on fixed support, test benches, thermostats, manostats and oil and petrol filters, among others
Zetdc recently said it was owed $1,2 billion and it was targeting to recover the money from mining, agriculture commercial and domestic users.
The power utility has to contend with obsolete coal-fired electricity generators, which constantly break down.
On Friday, Zesa was generating 472 megawatts (MW) of electricity, which is less than half the country’s peak demand.
The Bulawayo and Munyati thermal power stations were not producing anything as a result of breakdowns. Kariba was generating only 81MW, while Hwange was pushing 376MW and Harare contributed 15MW.
Zimbabwe is importing about 400MW from South Africa and Mozambique but the electricity is still not sufficient to keep the lights on and industry running.
Since June the country has had to endure the long hours of load shedding, which is crippling households and industrial operations.
Earlier this month, Zetdc increased electricity tariffs by 320% in order to meet the cost of power imports.
In the effort to acquire more foreign currency, Zesa opted to price electricity for the mining industry in United States dollars, at a cost which is slightly lower than the pricing structure prior to the recent monetary devaluation.
Zesa said it had intensified its revenue collection and will use the money to import electricity, improve, local power generation and import spares for network maintenance.