News / National
Zesa insolvent
01 Jul 2019 at 07:56hrs | Views
THE Zimbabwe Electricity Supply Authority (Zesa) is insolvent with its liabilities outstripping its assets by over US$92 million, a report by the Auditor General Mrs Mildred Chiri reveals.
The report was tabled in Parliament last week.
"I draw your attention to the fact that the company's current liabilities exceed its current assets by US$92 118 178, this indicates that a material uncertainty exists that may cast significant doubt on the company's ability to continue operating as a going concern," Mrs Chiri said.
In 2017 the company's liabilities exceeded its assets by US$84 167 798. The AG also said the company's financial were in shambles.
"Because of the significance of the matter described in the basis for the adverse opinion section of our report, the financial statements do not present fairly, in all material respects, the financial position of Zesa Holdigs Private Limited as at 31 December 2018, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards," she reported.
Zesa has attributed the challenges it faces to the sub-economic tariffs it charges resulting in production costs of electricity to remain higher than the sale costs.
The company last had a tariff increase in 2011. It owes foreign power suppliers, Hydro Cahorra Basa of Mozambique and South Africa's Eskom of at least US$80 million.
Government has paid US$10 million to South African power utility, Eskom, and paid off $20 million to Zesa Holdings to clear its debt.
Zesa is also expected to get an advance of $20 million from Government, in a move expected to improve power generation.
The country has been facing long periods of power outages due to depressed generation capacity because of low water levels at Kariba dam and obsolete equipment at Hwange Thermal Power Station.
The power utility has also been saddled with rampant cases of corruption has resulted in the suspension of its chief executive officer Mr Josh Chifamba.
One of its subsidiaries the Zimbabwe Electricity and Transmission and Distribution Company which paid US$4,9 million to Pito Investments for transformers it has not taken delivery of.
The same contractor was also paid in advance US$561 935 by the Zimbabwe Power Company in 2016 for the same equipment and is yet to deliver.
The report was tabled in Parliament last week.
"I draw your attention to the fact that the company's current liabilities exceed its current assets by US$92 118 178, this indicates that a material uncertainty exists that may cast significant doubt on the company's ability to continue operating as a going concern," Mrs Chiri said.
In 2017 the company's liabilities exceeded its assets by US$84 167 798. The AG also said the company's financial were in shambles.
"Because of the significance of the matter described in the basis for the adverse opinion section of our report, the financial statements do not present fairly, in all material respects, the financial position of Zesa Holdigs Private Limited as at 31 December 2018, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards," she reported.
Zesa has attributed the challenges it faces to the sub-economic tariffs it charges resulting in production costs of electricity to remain higher than the sale costs.
Government has paid US$10 million to South African power utility, Eskom, and paid off $20 million to Zesa Holdings to clear its debt.
Zesa is also expected to get an advance of $20 million from Government, in a move expected to improve power generation.
The country has been facing long periods of power outages due to depressed generation capacity because of low water levels at Kariba dam and obsolete equipment at Hwange Thermal Power Station.
The power utility has also been saddled with rampant cases of corruption has resulted in the suspension of its chief executive officer Mr Josh Chifamba.
One of its subsidiaries the Zimbabwe Electricity and Transmission and Distribution Company which paid US$4,9 million to Pito Investments for transformers it has not taken delivery of.
The same contractor was also paid in advance US$561 935 by the Zimbabwe Power Company in 2016 for the same equipment and is yet to deliver.
Source - chroncle
