By Sipilisiwe Ncube on 21 Nov 2017
And PAC Committee member Mwansa Mbulakulima threatened to surcharge Chola through monthly salary deductions in order to recover the license fees which Zesco owed to the Energy Regulation Board (ERB), stating that she had failed to guide the utility over the matter.Meanwhile Auditor General Ron Mwambwa noted that the Ministry of Energy repeatedly committed to a payment plan, which was never honoured.
Brig Gen Chola, who had a tough time responding to questions, made MPs laugh when she suggested that Zesco should be taken to court for not adhering to the law.
“I am very much aware chair that this has been going on for some time where Zesco has not been paying the license fees to ERB. Some of the challenges that Zesco has been going through is the financial turnover. The turnover had been going down due to the low tariffs. You may be aware that we recently adjusted the tariffs for Zesco, and we hope that their income will improve. The issue of explaining to the auditors concerning the non-payment of license fees by ERB, I think that is done but I think what the auditors are looking for is for Zesco to pay the money but not the explanation. And I think this is why this has been brought out. Otherwise the explanation is normally done to say the payment plan is there, they have assure us that they are going to pay. But unfortunately we have not been getting the payments from Zesco as agreed between ERB and them,” Brig Gen Chola said.
Committee Chairperson Howard Kunda then asked Brig Gen Chola to prove to the committee that she was a working PS by providing evidence of the payment plan made by Zesco to the ERB.
“PS we would like you to show us that you are doing something, not to come and tell us stories here. The honorable member wants correspondence that will indicate that there is something that you are doing to resolve this issue which is very serious because it is sky rocketing [for it] to increase by over 50 percent. I think to me we would suggest that as a controlling officer, you are not doing your job properly,” Kunda said.
And Mwambwa noted that the Ministry had continuously talked about the payment plan which it never produced.
“Chair, you noticed that this payment plan I think they talked about it even last year during the last seating. I think what they should be talking about now is the payment of the money because this payment plan doesn’t seem to be working anyway. The fees are skyrocketing, Mwambwa noted.
Kunda also chipped in, wondering why Zesco had continued paying seating allowances to board members, when the company had failed to pay license fees to ERB.
“And PS as you are answering that, how is it that Zesco is paying seating allowance when you are on those board meetings and they are failing to pay amounts that are very important to ERB to operate effectively? Kunda asked.
In her response, Brig Gen Chola requested that she be grilled together with Zesco.
“Chair the only way now maybe is litigation, taking them to court maybe if that is allowed. I don’t know because we have tried to sit with Zesco and ERB and how we can sort out this problem which has been going on for some time. Now that we see that we are not getting the results that we want, maybe the next stage is to take them to court but am not sure whether there is that provision. We will try and continue engaging with Zesco. But I think the honorable members also need to know that Zesco is a sub-warranted, they operate independent in terms of finances away from the Ministry. And that as a controlling officer, I am playing a supervisory role to Zesco. And Zesco will also be appearing before this committee and maybe that is where we can be grilled together with Zesco and ERB to see why Zesco is not paying because its a sub-warrant. Sorry chair maybe I am using military language, I withdraw that,” Brig Gen Chola said.
But Committee member Teddy Kasonso warned that the committee would extract what was due to the government just like what Zesco did to non compliant customers.
“PS, Zesco is a parastatal company, all of us know that and of course we also know that there has been two increases which Zesco has received in terms of the tariffs. Now the most important thing in this debate this morning is that you are a board member and as a board member, you are a Director on the Zesco board. You must be able to start directing Zesco to do the right thing. You know what Zesco does to the Zambian people when they don’t have the money? They switch off. So for this committee, we will also extract what is due to the government of the republic of Zambia just as Zesco. Don’t sit there and say oh, because Zesco is a parastatal therefore they can have an easy way, no ways!” Kasonso said.
Kasonso further warned that government would recover from any controlling officer who failed to perform his or her duties.
“PS you are a director on the Zesco board, here you are as a director and now you are saying you are even suggesting that oh no, you will take your own company to court, you play a dual role. Now in playing that role, you must ensure that Zesco pays. Are you aware that this committee can resolve to surcharge you? We begin deducting this amount in order to motivate you to ensure that Zesco pays. We can recommend that we start deducting from your salary, you get nothing. Here is a director chair who is saying we take Zesco to court, we expect a better answer than that. And take it from me, it is no longer business as usual. Any controlling officer who does not perform, government will recover from them,” warned Kasonso.
And in supporting the PS, ERB Executive Director Langiwe Lungu said it was difficult to withdraw Zesco’s operating license for failure to pay license fees because doing so was not for the benefit of the nation.
“I think the challenges with Zesco is that its a strategic institution, normally as a regulator what we would do is withdraw the license and stop and entity from operating but for Zesco that becomes difficult. All this time we have tried to negotiate with them and reason with them, we have evidence of the numerous letters that we have written to them. We have had plans that they have changed or not have adhered to. So I believe as PS said, we need to look at other enforcement action. For example, if today we say we will withdraw the license from Zesco and it has to stop operating, it wouldn’t be to the benefit of this nation so what we need to do is to explore what we need within our regulatory framework and the laws we can do to compel Zesco to pay because everything else has failed,” said Lungu.