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Restructuring Zesco will negatively affect consumers – Expert

• Restructuring comes at a great cost to a consumer.
• Splitting Zesco into three units will increase the overheads.
• The cost is going to be passed on to a consumer.

An Energy Expert says restructuring Zesco Limited into three separate units will come at a great cost to consumers.
Speaking in an interview with Money FM News, Yotam Mtayachalo noted that when the power utility is split into three units which are generation, transmission and distribution, three companies will be born from one firm thereby increasing the expenses which will then be passed on to consumers.
“We opposed the splitting of ZESCO into three units because while it may improve the efficiency of the power utility, it comes at a great cost to a consumer.”
“So I think they must be mindful because when you spilt into three for example generation, transmission and distribution, meaning that you are going to have three companies born from one company and that means that the cost, the overheads will go up because all these three companies are going to have boards, they are going to have management structures so it means that the cost is going to be passed on to a consumer,” Mr. Mtayachalo said.
Mr. Mtayachalo however stated that while plans to restructure the Company are welcome, stakeholders expect that the reforms will make Zesco more efficient and profitable.
“Plans to restructure Zesco Limited are welcome, however we just hope that those reforms will make Zesco to be more efficient and profitable. We don’t want a situation where you restructure a company and then the performance of this power utility is greatly affected.”
“I’m aware that there are some state utilities in Africa which were restructured but those countries have not really derived maximum benefits from such a move,” he stated.
Recently, Industrial Development Corporation announced plans to restructure state power utility ZESCO by splitting into three separate units, namely generation, transmission and distribution.

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