Minister Undenge blocks EcoCash, PowerTel deal

ENERGY minister Samuel Undenge reportedly blocked Econet Wireless Zimbabwe’s mobile money platform, EcoCash, from being one of the sub-vendors for power utility Zesa for unclear reasons despite the company being given the greenlight to sell pre-paid electricity tokens by Zesa’s board, it has been established.

 

Internet service provider PowerTel, a Zesa subsidiary, was appointed as the sole aggregator for the sale of pre-paid electricity tokens in 2014 after the State Procurement Board (SPB) twice cancelled the tender citing technical irregularities.

This came after Zesa rolled out pre-paid meters in 2014 in a bid to boost revenue inflows following a high default rate by postpaid electricity users.

PowerTel’s appointment riled some of the 37 companies that had tendered for the role prompting them to approach government seeking to have the process re-tendered.

The tender was initially advertised in August 2012, but was cancelled before the closing date of submission. It was then re-issued last September, but was again cancelled by the SPB on January 2. The Ministry of Energy and Power Development appointed PowerTel soon after.

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Letters seen by this paper show that EcoCash was granted permission to be one of PowerTel’s sub-vendors in May.

“Subsequent to the meeting at Zesa Holdings on 8th April 2016 attended by the Zesa Holdings board chairman, PowerTel board chairman, the group chief executive officer and consultations with the ministry, PowerTel can now connect to a wider pool of sub-vendors in order to expand the geographic footprint for the distribution network of electricity tokens,” reads an internal memo by Zesa.

“As a start, PowerTel should focus on connecting to some of the existing sub-vendors in order to reduce the tiers in the e-vending structure.”

“The new sub-vendors to be connected should go beyond the existing public and private vendors in order to improve customer convenience. For the avoidance of doubt, PowerTel can connect sub-vendors using EcoCash. This will enable PowerTel to improve its performance by the increase in its current proportion of commissions, where there will be more direct vendors and fewer sub-vendors.”

Sources at the power utility said for three years EcoCash, a mobile money transfer platform run by telecoms company, Econet, had been denied the opportunity to sell pre-paid tokens, which have been opened up to parastatals and other private players.

“The minister seems not keen to give EcoCash the go-ahead to sell the tokens despite approval from the Zesa board.

Interestingly Zesa seems to be the only parastatal not working with EcoCash, which means it is someone within the ministry,” a source said.

“Millions of Zimbabweans especially in the rural areas have to board buses to go and buy a US$10 token, which they could do within the comfort of their homes.”

Undenge did not answer calls or reply to an SMS sent to him on Wednesday.-AMH