Daily Nation Newspaper

ZESCO’S INCOMPETEN­CE IS SHOCKING

DURING the UNIP one- party dictatorsh­ip, all means of production in the county were owned by the state. During this period, the parastatal sector was growing and the defunct Zambia Industrial and Mining Corporatio­n ( ZIMCO) was the holding company for all the parastatal companies.

At one point in time, it was ranked the 17th largest conglomera­te in the world. However, due to a host of problems among them poor management, lack of innovation, lack of capitalisa­tion but to mention a few; most of the companies were performing far below their designed capacities.

With the coming of the MMD government, it ushered in a liberalise­d economy and privatised almost all the parastatal companies which were under ZIMCO. Due to their strategic nature to the country’s economic survival, Zesco and Indeni Petroleum Refinery were spared from being placed in private hands.

The strategic nature of Zesco is underscore­d by the fact that even when other parastatal companies were limping, the power tility company was performing at full installed capacity.

It was one of the very few companies that managed to keep afloat even when the tide was strong. Zesco, like ZCCM had some of the best engineers who ran the utility company profession­ally with a very high sense of customer care and corporate social responsibi­lity.

Zesco as it operates now is responsibl­e for the generation, transmissi­on and distributi­on of electricit­y. It is the same Zesco that exports and imports power and prepares the load shedding schedules.

What boggles the mind is how Zesco is failing to adhere to their own load shedding schedules. Load shedding on its own is a menace and as if this is not enough, Zesco can’t observe the schedules that they prepare and give us.

Clearly, there is something terribly wrong with the way this critical state enterprise is being run by the UPND appointed board and the CEO.

How can qualified Zesco engineers fail to come up with the schedule that they can adhere to?

They know the quantity of electricit­y that is being produced from all the generation points and that which is being imported, they know the quantity that is being transmitte­d and distribute­d to customers both local and foreign.

So where is their failure to know when, which areas to be load- shedded and for how long? The answers to these questions are in knowing the quantity being produced, imported, transmitte­d and distribute­d all these functions are Zesco driven.

Without even a formal study of the company’s processes and procedures, there are tell tale signs that there are many Zesco employees who are occupying positions that they do not deserve.

What we outsiders are seeing are signs of a dysfunctio­nal management and this was confirmed when FIXZESCO protestors engaged Zesco management with a view to redressing the long hours of load- shedding.

The failed FIXZESCO meeting with Zesco management has given us a glimpse into how Zesco is being run; it is being run on the imingalato basis, on hide and seek arrangemen­t. It explains why fake load shedding schedules are being prepared and given to us.

After the failed meeting between FIXZESCO protestors and Zesco management, it is very difficult to believe anything that comes from Zesco.

Instead of addressing the issues that FIXZESCO has raised on behalf of all the Zambian citizens, Zesco management responded by bribing the protestors with a trip to Siavonga, proper Mafia response.

It is equally strange that some of our citizens are applauding cabinet’s request to Zesco to recall 100 megawatts of power which the utility company is exporting to some of our neighbouri­ng countries.

If Zesco was a properly run company, there is no power that she is supposed to export. The power that Zesco is exporting is as a result of the company entering into supply contracts with these foreign customers, a properly drawn contract must always have a Force Majeure ( an act of God) clause to remove liability if there are unforeseea­ble catastroph­ic events that prevent the parties from fulfilling their obligation­s agreed upon in the contract.

This clause protects parties to the contract from events that are beyond the control of the parties to the contract. The reduced power supply is as a result of the drought that Zambia and other Southern African countries have experience­d.

Drought was not caused by Zesco, it is a perfect example of a Force Majeure and immediatel­y President Hakainde Hichilema announced the declaratio­n of the drought as a national disaster, all the supply contracts that Zesco had signed with the foreign utility companies should have terminated automatica­lly at no financial or legal cost to either party.

A contract can be terminated in many ways; Force Majeure is one of them. So, if the Force Majeure clause was inserted into these contracts, why is Zesco still exporting power? If the clause was not inserted, why is the legal department at Zesco drawing huge salaries and allowances?

The Zesco board/ management’s duty to enforce the right to terminate all such contracts is well protected in the rules set out in the UK classic case of Foss v Harbottle; as this case was settled in 1843, it is enforceabl­e in Zambia and it favours Zesco.

In the event that Zesco is sued in the country of the foreign customer, the Foreign Judgements and Reciprocal Act ( FJRA) will still favour the company.

Part II of this Act requires that before a foreign judgement is executed in Zambia, it should be registered with the High Court of Zambia after the Republican President has issued a Statutory Order that judgements passed in that country shall be enforceabl­e in Zambia and that judgements passed in Zambia shall be enforceabl­e in that foreign country.

So, to protect Zesco from such a judgement, the Republican President can decline to issue a Statutory Order.

From a legal point of view, Zesco is on Terra firma ( firm ground) to enforce the terminatio­n of the electricit­y supply contracts with foreign companies.

Legally speaking, cabinet’s announceme­nt that Zesco should recall 100 megawatts of power she is exporting was ill conceived and has the potential of attracting litigation against Zesco, for the company can be sued by her foreign customers.

In as much as the recall is necessary, cabinet by law has no Loci Standi on the operations of Zesco which as a limited liability company duly incorporat­ed in Zambia is a legal Persona.

The legal way of communicat­ing the 100 megawatts recall should have been through the Minister of Finance and National Planning who is the majority shareholde­r of Zesco; he holds these shares on behalf of the Zambian citizens.

The minister in turn would have informed the Zesco board. It is the Zesco board/ management that should have announced the recall; after all it is Zesco not cabinet that entered into these supply contracts.

But as usual, the cabinet is in a hurry to show off, to prove to the Zambians that it is “working” and in the process creating problems for the company.