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From unbundling back to re-bundling: Zesa undergoes massive restructuring

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POWER utility Zesa Holdings Limited, reeling from a huge debt, unpaid bills and corruption, has embarked on a massive restructuring exercise to re-bundle its subsidiaries into one entity and recruiting experts, including former employees, in a move that has unsettled some senior managers who stand to lose their jobs and perks.

JONATHAN MBIRIYAMVEKA

The state-owned company, tasked to generate, transmit, and distribute electricity in Zimbabwe, has several subsidiaries, including the energy generating entity Zimbabwe Power Company (ZPC), the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), investment arm Zesa Enterprises and internet provider PowerTel Communications.

A forensic investigation done in 2019 by PricewaterhouseCoopers Advisory Services, with the involvement of the Auditor-General’s office, on Zesa, which is owed millions in United States dollars and billions in local currency, unearthed tender and financial irregularities on a massive scale. Last year, Zesa was owed US$30 million by debtors in foreign currency and ZW$3.2 billion in local currency by debtors who include government and local authorities, but those figures have since gone up.

Harare City Council alone currently owes Zesa ZW$1.99 billion.

In a bid to break with the past, Zesa has engaged EY Zimbabwe to help it through a new re-bundling exercise which will involve consolidating its subsidiaries into one entity like it was before.

This is in line with a 2018 cabinet resolution that Zesa should be consolidated to ensure cost-effectiveness and efficiency.

Zesa has now moved to boost its core team by luring back skilled former employees as consultants.

Among the new consultants is United States-based Itai Utah, who is coming in as a consultant for innovation technical services, while Cletus Nyachowe, an engineer, will provide consultancy on international business.

Tanda Chisi, another engineer, returns to Zesa from the energy regulator, Zimbabwe Energy Regulatory Authority, to consult on power projects.

More engineers have also expressed interest in returning to the power utility from the diaspora, company sources say.

“From research, Zesa is employing the strategy that is being used in the United Kingdom and Eskom of South Africa where ex-employees have been re-hired and are nicknamed ‘the grey beards’ and provide consultancy on various issues of their expertise,” a source said.

Company sources say Gata also made internal transfers to boost the core team, triggering complaints of corruption by those affected.

Acting ZETDC managing director Lovemore Chinaka returns to his base where he was redeployed as general manager for the Western Region. He has been replaced by Egenn Choga, who has been appointed in an acting capacity.

Ralph Katsande, an engineer, has been appointed acting commercial director. This move is also meant to improve efficiency of the power company which has failed to produce enough electricity for the country’s domestic and industrial requirements.

Yesterday, Zesa executive chairperson Sydney Gata appointed the five former Zesa employees, some from abroad, hinting that he was in the process of luring more skilled personnel back to the power utility.

This came as some insiders say Gata could be fired if he loses control of the complex process.
Between 2005 and 2006, Zesa lost key experienced staff, with over 400 going to South Africa to join that country’s power utility company Eskom.

The United Kingdom got 72 graduate engineers, while Australia has 65 ex-Zesa employees.

“Furthermore, the recent forensic audit removed a number of key skilled personnel. What it means is that the country is in trouble as it no longer has the threshold minimum density of techno-industrial skills to support an aggressive recovery programme for stabilisation and growth of electricity supply as enshrined in the National Development Strategy 1 (NDS1) and Vision 2030 objectives,” Zesa said in a statement.

“This is the reason why the consultants have been brought in as a stop-gap measure as the company awaits implementation of the cabinet directive of 2018 to re-bundle Zesa into one single entity. The government appointed EY (Ernest & Young) to carry out this exercise and the report will be presented to government and posts will be advertised.”

In a bid to meet targets of the NDS 1, Zesa says it will need to attract highly skilled professionals.  Within the next four years, the power utility will be required to produce 2 050 megawatts and requires a huge staff compliment.

The country has since the turn of the century suffered severe skills flight, as professionals left the country for greener pastures.

Gata confirmed the development, saying the company was poised to retain its former workers.

“I have an unflinching determination to deploy Zimbabwean professionals to come back and develop their country as this is how many economies have developed. We shall be putting more detailed developmental plans in line with the aspirations of the National Development Strategy and Vision 2030. The irony is that there is no noise when expatriates are hired, but some talk when we look at our very own nationals. Similar developments are in the pipeline for the establishment of the projects department, protection department and the operations and maintenance of Hwange and other power stations. We are seeking for qualified Zesa people to come and take up these positions so as to enable universal access,” Gata said.

Brushing aside corruption charges, he said the consultant appointments were above board, having been approved by the Procurement Regulatory Authority of Zimbabwe (Praz).

“In terms of corporate governance, we are well-educated on this and post the forensic audit, we are now graduates of corporate governance and we followed all the Praz procedures. Each and every one of the appointees had attained the minimum qualifications of being a Zesa director and we will continue to engage only people who left Zesa without any issues or incidents,” Gata said.

“In fact, we are the talk of the region and dubbed the ZETDC in southern Africa where they say we are the Zimbabwe Engineers Training and Development Company as we are a fish pond as there are many of our former employees holding senior positions in most utilities. We have the commitment to bring back our people under the new dispensation and meet the targets of the NDS 1 and Vision 2030 for the benefit of the generality of Zimbabweans including our esteemed journalists.”

 

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