CUTS Unhappy with Proposed Power Tariffs’ Hike

Daily Nation, March 26, 2019

THE CONSUMER Unity and Trust Society (CUTS) has expressed concern over the proposed increment of electricity tariffs by the Energy Regulation Board (ERB).

In a press statement released to the Daily Nation yesterday, CUTS centre coordinator, Chenai Mukumba, observed that while the firm was in agreement that Zambia should begin to gradually move towards cost reflective tariffs, consumer interests should remain at the centre of all interested parties. CUTS also stated that Zesco should start moving towards internal reforms for it to be efficient.

”In 2016, the Minister of Finance indicated in the 2017 National Budget Address that a Cost of Service Study (CoSS) needed to be undertaken in order to ensure that consumers do not pay for inefficiencies within ZESCO.

This pointed to the recognition that there are existing inefficiencies within the parastatal and that if these remained unaddressed consumers would be the ones to carry their financial burden.

These concerns have long related to staff numbers and their costs.

”While the Cost of Service Study has indeed been delayed, we are opposed to a revision of prices before this is released as it is imperative to make sure that consumers are not being unfairly penalised for inefficiencies within Zesco. As such, before shifting the burden towards consumers, Zesco should first and foremost look to resizing the structure of the institution to achieve efficiency,” stated part of the statement.

The organization further noted that there was need to increase the coverage of electricity in Zambia, particularly in rural areas, and secondly, identify ways of better targeting subsidies to ensure that subsidies accrue to those most in need.

CUTS said the proposed increased tariffs will have negative effects on the provision of goods and services on both the economy and social sector.
”This proposed tariff hike will mean that we will see an increase in the cost of production of all goods and services. With this increased cost of production, we expect a rise in the prices of commodities despite the fact that disposable incomes for most households have remained largely unchanged, concludes the statement.

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