Eskom NERSA

Organisations criticise ‘untransparent’ and ‘inefficient’ Eskom

Organisations criticise ‘untransparent’ and ‘inefficient’ Eskom
14TH JANUARY 2019
BY: KIM CLOETE
The Organisation Undoing Tax Abuse (Outa) has suggested that Eskom  should be granted an electricity tariff increase of only 5% over the next three years and pushed for a radical overhaul of the utility.
“We recommend a consumer price index tariff increase of 5% a year for the multiyear price determination (MYPD) 4 control period.”
Outa energy  portfolio head *Ronald Chauke  on Monday told the National Energy  Regulator of South Africa <(Nersa) that he was also “deeply concerned” that Eskom ’s application for a 15% increase over the next three years was not transparent and had been delivered in a complicated manner.
Chauke criticised Eskom  for using “outdated assumptions” and called for the utility’s regulatory asset base to be sorted out. He also said Eskom  had to design  a new coal procurement strategy.
He called on Eskom  to come up with a viable business <www.engineeringnews.co.za/topic/business> model.
“Eskom  is going nowhere and is technically bankrupt until it changes how it does its business . The cost of Eskom ’s inefficiencies from 2006 to now amounts to more than half a trillion rand because of rampant corruption, maladministration, poor procurement decisions and poor leadership.”
Chauke said South Africans were paying “the ultimate price of political meddling in the affairs of Eskom , State capture’s ravaging implications, the cost of corruption, weak leadership and poor decisions and mismanagement”, while procrastination in taking decisions was also costing the utility.
“We accept and understand the reality that Eskom  is in a dire financial  state, but government needs to play a lead role. It shouldn’t be resolved from one angle.”
Meanwhile, in his presentation, *Ted Blom  *from Mining  and Energy  Advisors, called on Nersa to scrap an increase determination until it had received a full forensic report into corruption and maladministration in Eskom
“Eskom  is de facto corrupt, inefficient and bankrupt,” he charged.
Blom said Eskom was “grossly inefficient” and “still captured”. He also accused the utility of taking far too much time to come up with a turnaround plan to stem its escalating debt.
“We have been awaiting a board turnaround plan for too long. How can an organisation losing more than two-billion rand a month have 12 months latitude to come up with a turnaround plan?” he asked during public hearings.
Blom lashed out at Eskom , saying it was “leaking cash massively”. He said proposed sharp tariff increases were not tenable.
“The President is trying to kickstart the economy, while we would be whacked with an electricity tariff .”
He also questioned the cost of coal .
“Coal  costs should be R30-billion a year. This year [coal ] cost R73.3-billion. Where is the missing R40-billion? How difficult can it be to spot R40-billion? There is something wrong and someone needs to be held accountable for this mess.”
Blom also questioned why executives currently in Eskom  had not blown the whistle on corruption within the utility in recent years.
EDITED BY: CREAMER MEDIA REPORTER

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