Zimbabwe faces power cut

Elections added to economic instability in Zimbabwe

South Africa's power company Eskom has threatened to cut electricity supplies to Zimbabwe because of unpaid bills.

Eskom senior manager Peter O'Connor said that the debts were increasing slowly.

"Obviously it is a worry for us and we are taking steps through the correct processes to address it."

The debts are owed by the Zimbabwe Electricity Supply Authority (Zesa), which imports a substantial amount of the country's power needs from Eskom.

Due to a failure to pay its bills, Zesa has already seen its imports from Eskom cut to 150 megawatts from 450 megawatts.

Foreign currency

Eskom said payments stopped in the lead up to Zimbabwe's parliamentary elections in June and have only just resumed.

It claims Zesa owes it more than 140m rand ($20.1m).

Zesa has blamed the unreliable payments situation on a severe shortage of foreign currency as Zimbabwe grapples with its worst economic crisis since independence in 1980.

The Zimbabwean government has raised the possibility of privatising Zesa as part of wider economic reforms but analysts say little progress has been made with the plans.

Despite the dispute, Eskom said it would consider buying into a restructured Zesa.

Black market

"We have informally talked about taking up a stake ... but we will have to wait for the privatisation process," Mr O'Connor said.

Efforts to recover the debts have included the establishment last week of a trust account in Harare into which Zesa would make deposits.

However, nothing has yet been received in it, Eskom said.

The Zimbabwe dollar stood at an official rate of 50:1 against the US dollar on Tuesday following a 24% devaluation earlier this month.

But dealers said the local currency was changing hands at up to 60 to one US dollar on the black market as sellers of foreign currency held out for better rates in a tight market.