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Financial woes weigh down Zesa subsidiary

Zent is charged with producing and maintaining transformers.

ZESA Holdings subsidiary, Zent Enterprises (Zent) is failing to manufacture transformers to meet demand due to multiple challenges such as outdated equipment, a parliamentary committee investigation revealed.

Zent is charged with producing and maintaining transformers.

Reports indicate that Zent requires about US$7,2 million per year to produce between 250 and 300 transformers every month.

According to a report presented in Parliament by the Portfolio Committee on Energy and Power Development on March 2 following site visits, Zent is hardly managing to do its core business of manufacturing transformers.

According to the report, Zent was contracted by the Rural Electrification Fund, Zimbabwe Electricity Transmission and Distribution Company and Electricidade de Moçambique to manufacture 6 100 transformers, but failed to meet demand.

Zent was contracted to produce the transformers in 2021.

“Zent only managed to deliver 3 716 transformers due to foreign currency challenges,” committee chairperson Joel Gabbuza said when presenting the report.

“The utility had set a target to manufacture 1 982 transformers in 2022 against the order balance of 2 384 transformers.

“At the time of the visit by the committee in May 2022, the utility had only manufactured 161 transformers since January 2022 due to shortages in foreign currency and delays in deliveries of materials caused by COVID-19 pandemic measures.”

Gabbuza said Zent had old and obsolete equipment.

“Zent expressed concern that it was operating with aged and obsolete equipment that continuously required spares that were unavailable and this reduced its capacity to manufacture transformers as well as its competitiveness in the industry,” he said

Early last year, the committee conducted a tour of the Zent plant in Harare and discovered that a transformer test bay worth around US$2 million bought from Germany in the 1990s was lying idle.

During its tour the committee learnt that private local manufacturers such as Hawker Siddeley Engineering (South Wales), Nical Transformers and SE Electricals Engineers revealed that they had been pushed out of business by cheap sub-standard imported transformers.

“The local manufacturers highlighted that the influx of cheap imported transformers of poor quality, particularly from India and China had crippled the local manufacturing industry,” Gabbuza said.

“The local manufacturers feared that continually importing transformers would eventually lead to the closure of the local industry.”

He added: “They also indicated that their transformers were costlier in the local industry compared to imported transformers.

“As such, an imported 25KvA aluminium transformer was priced around US$1 000-US$1 800 while locally produced ones were around US$3 300.

“Consequently, local clients preferred to purchase imported transformers even though they could not last longer compared to locally-produced transformers.”

The revelations were at a time when Zimbabwe is in the throes of a crippling power crisis where consumers are going for up to 20 hours per day without electricity.

Recently, Energy minister Zhemu Soda said they could not provide a load shedding timetable due to unreliable production capacity.  As of yesterday the country’s power stations produced 522 megawatts against a daily demand of about 2 000Megawatt (MW).

Munyati Power Station and Bulawayo produced zero MW. 

The Harare Power station, which has the capacity of producing 21MW produced zero.

Kariba South Power Station with an installed capacity of 1 050MW produced 199MW.

Hwange, with an installed capacity of 920MW was currently producing 323MW.

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