HARARE - Former Energy and Power Development minister Elton Mangoma talks to our Senior Assistant Editor Guthrie Munyuki about mandatory blending and his plans for Zesa which would have turned the power utility into profit-making. Below are the excerpts of the interview.
Q: During your tenure as Energy minister you were against mandatory fuel blending what were the reasons for that?
A: You could not use public policy to benefit an individual. This means that you cannot let an individual benefit by forcing people to buy a product that has failed to find traction on the market.
The price at which the product is being sold at is higher both on account of the international price and the calorific value of ethanol compared to petrol.
The international price of fuel was between $0,68 and $0,80. The calorific value is the power one gets from either petrol or ethanol.
Ten litres of ethanol are equivalent to 7,2 (seven comma two) litres of petrol. The price of petrol is between $0,90 and $0,95 a litre.
Basing the ethanol price on the calorific value would be $0,68 per litre. What is the justification of charging a premium let alone of more than 25 percent? It’s called corruption.
A study done by the World Bank on production of ethanol in Zambia indicated that the actual cost of producing it was less than $0,50. There are vehicles that are affected by a blend of 10 percent and more.
These vehicles require catalytic convertors. If blending is mandatory then you cannot force the consumer to incur extra costs either for buying the catalytic converters or extra repair costs caused by the ethanol.
Green Fuel was displacing villagers who are now destitute. How could I, in an independent Zimbabwe, be supportive of a person who puts local people into poverty?
This gets worse when the race factor is taken into account. The facts are, Macdom Investments (Macdom) had gone into an agreement, very prejudicial to Government, with (Arda) Agricultural Rural Development Authority.
The Arda Chisumbanje Estate is just over 5 000ha (Hectares). Macdom cultivated about 2 500ha in this estate.
Then without authority encroached on over 3 500ha of communal land, displacing the villagers and denying them livelihood.
This situation is no different to the practice under the Colonial Land Apportionment. There were other numerous complaints by the villagers, caused by Macdom symptomatic of a bad and cruel neighbour at best otherwise simply imperialistic.
Q: As Energy minister why were you not convinced that mandatory blending was the best route for Zimbabwe?
A: This is not correct. I was convinced that responsible mandatory blending should be done.
This is why I issued a statutory instrument that blending should be done at five percent.
This also requires that the producer of the ethanol to be used for blending should be public in character so that the benefits accruing from mandatory blending will accrue to the majority of the people of Zimbabwe.
The current blending is being done in contravention of that law.
Q: How compatible is E10, E15 with modern cars because there is a strong argument that Zimbabwe once blended fuel therefore there are no dangers?
A: It is true that Zimbabwe and Rhodesia before that, once used to blend petrol. The technology of engine manufacture has moved on since then.
E10 and above, affect some of the modern cars. This is a fact established through research and pronouncements by the vehicle manufacturers.
There is however, also technology that allows for flexi fuel engines and these cars are here in Zimbabwe.
They can use 100 percent ethanol without any damage. It is this fact that resulted in the licencing of E85 whilst E15 and E20 could not be licenced.
Q: Cabinet backed you in refusing mandatory blending so who has granted the Chisumbanje Ethanol project the national status if Cabinet nullified the BOT agreement between Arda and Green Fuels?
A: I was the minister until early September 2013. There were no Cabinet meetings from early July 2013.
Government therefore did not change its position on this matter. It therefore means that whatever was done was illegal. This comes back to the issue of rule of law which has been a perennial problem with Zanu PF.
Q: In countries that have mandatory blending, how do they protect cars from possible damage?
A: The mandatory blending is set at levels that do not harm the vehicles. In all these countries except Malawi, the mandatory blending is not more than 10 percent.
Brazil is the leader in ethanol production, and also in the production of flexi fuel engines.
This way the engines are the right ones for that policy. These countries also ensure that the vehicles in their countries are the right ones to use the blends.
Those that need adjusting are done at the expense of the State.
These countries realise you cannot punish the motorist like we are now doing in Zimbabwe.
Q: Was this protection of engines) granted in your discussion with Green Fuels because motorists are just fueling without any equipment to protect their cars?
A: Green Fuel had promised to fit the catalytic convertors but never availed any, nor put any system or logistics to do so.
This was still necessary even when the blending was not mandatory, as other motorists would have liked to use ethanol on a voluntary basis.
There are some people who think they have resolved the problem by taking short cuts and using force.
These problems will not go away and they will increase with the increase in the blending ratio.
Q: You introduced electricity pre-paid metres during your tenure but this project has so far failed to reach thousands of households. Was this is a good idea in the first place?
A: Your facts are not correct. By the time I left, more than 50 percent of the domestic consumers had pre-paid metres.
Pre-paid metres is an excellent idea given the popularity of them with the majority of the honest consumers.
Billing by ZETDC continues to have challenges and (with) many consumers receiving estimated bills.
Prepaid metres resolve this problem. Prepaid metres also took away the need to disconnect any consumers.
They also allow the consumers to self regulate so that they consume electricity which they can afford, rather than be surprised by a large bill and disconnection later.
Q: How does the pre-paid metre benefit consumers when there is acute shortage of power and intermittent power cuts?
A: The consumers pay for what they actually use. When there is no electricity, the metre stops as well.
The plan was also meant to reduce the power cuts, when complimented by the use of smart metres by consumers outside of rural, high density and light agricultural consumers.
The smart metres allow for a reduction in the electricity sent to each consumer to allow them to have some power enough to do some but not all activities that is smart load limiting.
A household can get enough to cook with one plate, watch TV, listen to the radio and light part of the house.
This would then release the saved electricity to other consumers. This would be different to the current situation of having 100 percent or zero.
Q: You have been accused of having attempted to sell-off Zesa through privatisation. What was your plan on Zesa?
A: What was alleged is impossible, unless of course one presumes working without following the rule of law. MDC cadres are law abiding.
The plan was as follows:
- Dissolve Zesa Holdings so that the subsidiary companies stand on their own. This would stop the production of consolidated financial statements.
The consolidated financial statements show Zesa as insolvent thereby painting the whole organisation as a sick company.
This dissolution of Zesa Holdings would only leave one of the successor companies as sick and the others would be healthy enabling them to borrow and grow.
This was done when Noczim (Petrotrade) was dissolved. Now its successor companies are very healthy.
- The standalone companies would be Zimbabwe Power Company (ZPC) responsible for power generation, Zimbabwe Electricity Distribution Company (ZETDC) responsible for electricity distribution and retail, Powertel responsible for data management.
These companies will be healthy and be in a position to expand and improve services.
The one that would carry the debt is the National Grid Services Company (NGSC) responsible for transmission, systems operation and market operations.
- The National Energy policy and the Electricity Act allow for the existence of Independent Power Producers.
These producers need the confidence of both an independent Energy Regulator and Systems operator.
This is what will bring private investors into the sector, which had not seen investment, private and public since 1980, hence the power shortages.
Q: What is the best plan for Zimbabwe to increase its power generation?
A: Government does not have the resources to put in the required generation capacity.
This can only be achieved in the short to medium term by bringing in private generation investment, commonly known as Independent Power Producers (IPPs).
The long term power security can only be guaranteed by building Batoka and Devils Gorges and regional projects like the Great Inka.
Long term projects are difficult to implement especially by a party with no foresight and steeped in grand standing and short-termism like Zanu PF.