HARARE, Zimbabwe's State-owned power utility, Zesa Holdings, has informed its employees that it is unable to honour a 2012 collective bargaining agreement reached with them because of financial constraints and has urged the workers to call off a planned strike.

Zesa employees have threatened to strike after the power utility failed to honour the agreement which obliges it to pay workers according to seniority and qualification.

The union has put in a modest demand of 50 per cent cost of living adjustment in order to cushion workers from the rising cost of living. The demonstration sought to warn Zesa that it should adjust employees' salaries or face collective job action, said the General Secretary of the National Energy Workers Union of Zimbabwe, Thomas Masvingwe, in December last year.

In a state here Sunday, Zesa Holdings said it was unable to effect the pay rise because of financial incapacity. It (Zesa) was and remains technically insolvent as evidenced by a net liability position of 479 million US dollars as at December 2012. It has been on a loss-making trend with an audited accumulated loss position of 217 million USD in 2016 which is projected at 393 million USD by December 2017, the company said.

The utility is also continuously faced with inauspicious demands for increases in conditions of service. It is, however, constrained to accede to these demands as they currently stand. To do so would cripple service delivery and further worsen the already precarious financial position.

Zesa said it would seek to engage its employees to find an amicable solution, highlighting that the industrial action, if it happened, would negatively impact on operations. The power utility is however putting in place contingency measures to manage and mitigate against the action to ensure that the public is not unduly inconvenienced, the company said.

Zesa Holdings, which has around 7,000 employees, owes its workers millions of dollars in unpaid salaries accrued from the 2012 collective bargain agreement.