10 February 2014

Zimbabwe: Zesa CEO's Term Extended

Government has extended Zesa Holdings chief executive Eng Josh Chifamba's term of office by another three years while a new board, expected soon, will determine his conditions of service.

Energy and Power Development Minister Dzikamai Mavhaire last Friday said the extension of the CEO's term of office followed the expiry of the power utility board's tenure last December.

Minister Mavhaire said that in terms of the law it was the responsibility of the power utility's board of directors to appoint the CEO and also determine his conditions of service.

"We extended the CEO's term of office because you cannot remove the board and the CEO at the same time," the minister said.

The CEO's tenure expired on January 31, 2014.

"The board's term of office expired before the expiry of the CEO's contract, but it is the board that appoints the CEO. The new board will look at the CEO's conditions of service," he said.

The expiry of Eng Chifamba's tenure had caused some confusion within Zesa on how group operations would be synchronised after the boards of subsidiaries were dissolved when the term of office for the utility's board expired.

After the expiry of the Zesa board's term of office Minister Mavhaire directed that all board activities of Zesa units be suspended and that all strategic issues be reported to the group.

The power utility is made up of four subsidiaries namely Zimbabwe Power Company, Zimbabwe Electricity Transmission and Distribution Company, Powertel and ZENT Enterprises.

Sources, however, said Government had not given prior six months notice to the CEO on whether it would renew his contract or not. This meant that, inevitably, Government had to extend his term or else it would have had to pay him the equivalent for the period. The notice condition is said to be in the CEO's contract.

Considering the many issues said to be outstanding at the power utility, Eng Chifamba's exit would have caused operational and project disruptions at the State-owned company.

Government last December signed a US$319 million deal with China Export and Import Bank for the expansion of Kariba South Hydro Power Station's power generation capacity.

This came after Chinese firm Sino Hydro won the tender to expand the hydro power utility's generation output by 300 megawatts.

In the same vein, another Chinese entity, China Machinery Engineering Company, won the tender for expansion of Hwange Thermal Station units 7 and 8 for an additional 600MW in what should ease power deficits in the country.

Zimbabwe requires about 2 200MW at peak of demand, but is currently only able to generate an average of 1 200MW with the deficit minimised through imports from the region.

Zesa is also in the middle of a major project, prepaid meter installations, to ensure efficient and optimum use of electricity at a time the country is facing crippling power shortages.

The prepaid meter installation programme has been characterised by a lot of irregularities, which have slowed down progress.

The power utility has also been rocked by allegations of improprieties relating to procurement deals at its units and the issues require the full attention of the CEO.


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