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ERB recommends revocation of Goldstream Licence, warns OMCs and directs ZESCO and UMCIL to finalise PPA

The Board of the Energy Regulation Board (ERB) on 19th June 2007 resolved to recommend revocation of the operating licence for Goldstream Oil Limited, for failing to utilise its licence since it was granted in 2005 and for failing to maintain 15 daysâââ stocks of petroleum products.

The recommendation for the revocation of the licence has been made to the Minister of Energy and Water Development in line with the Energy Regulation Act.

In recommending revocation of the licence, the ERB observed that the company had breached its licence condition by failing to maintain 15 daysâââ stock and that since the company had not utilised the licence, it was not in the public interest to continue licencing the company.

In the dispute between ZESCO Limited and Universal Mining and Chemicals Limited (UMCIL), the ERB has directed and ordered that the clause requiring review of the tariff after 5 years be removed from the Power Purchase Agreement (PPA), because the initial tariff was already significantly higher than the cost of providing the service.

The Board also directed that a clause which would have otherwise compelled ZESCO to supply 2MVA minimum power to UMCIL be removed from the PPA. The two companies have been given 14 days within which to finalise the PPA.

Meanwhile, the ERB has also directed Zambezi Oil and Transport (ZOT) and Petrotech Oil Corporation to remit outstanding Strategic Reserve Fund (SRF) receipts within 30 days failure to which their licences would be suspended.

The two companies have also been warned to start complying with Statutory Instrument No: 90 of 2005 and Licence Clause 2.5.5, which requires OMCs to have at least 15 days working stocks of petroleum products at any one given time. ZOT and Petrotech have been given 7 days within which to comply with the SI and relevant licence condition.

Further, ZOT has been directed to put in place a system to maintain records of their transactions, while Petrotech Oil Corporation has been directed to submit information on their transactions regularly, failure to which the ERB would take enforcement action against the companies.

Another OMC, SGC Investments Limited has been directed to immediately close down its Mungwi Road Service Station because it does not meet the set standards.

The decisions were arrived at after Hearings on Tuesday 19th June 2007 during which the concerned OMCs were given an opportunity to show cause why enforcement action should not be taken against them.


22nd June 2007

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