Sikonathi Mantshantsha | August 12 2013 | BD Live
ESKOM has finally owned up to the full liability it faces as a result of preferential deals to supply cheap power to BHP Billiton’s aluminium smelters, putting it at a stunning R11.5bn in its latest financial statements — double that stated in previous years.
In last year’s statements, Eskom put the liability from the contracts at R5.9bn. For the year ending March 2013, this has been restated as R11.5bn.
This is essentially “lost” revenue, as a result of the contracts which supply the smelters according to various formulas at less than half the cost it takes to produce the power. The Billiton contracts were kept under wraps until March, when court action by Media24 forced Eskom to reveal the true cost of the agreements.
In its latest statements, Eskom appears to be taking into account that the contracts will run even longer than initially thought, causing it to take a larger hit on its balance sheet.