FRIDAY, 6.00PM:
THE Portuguese government is in a dispute with the South African electricity parastatal Eskom over an 18-year-old agreement about funding the Cahora Basso power station project, parliament was told on Friday.
The acting director-general of South Africa’s department of mineral and energy affairs, Dick Bakker, said South Africa loaned Portugal R35 million in 1969 to help establish the hydro-electric project. With interest this amount has since increased to R160 million, which will only be repaid once Portugal’s own debt is paid.
Portugal abandoned its former colony of Mozambique in 1975, and work on the project was abandoned for 15 years while civil war raged. Today, the project’s accumulated debt stands at US$3,1 billion, and revenues will only begin to flow in October, when it is finally completed.
Eskom can generate power more cheaply by establishing a new power station for $US2 billion than buying from Cahora Bassa at R0,02/KW hour. But unless it sticks to its contractual agreement to buy power from Cahora Bassa, the debt will not be repaid.
Bekker said Portugal was trying to recover as much of its debt as possible through tariff negotiations, but Eskom was resisting this as it would mean South African and Mozambican consumers would pay for the Portuguese debt.
“The (final) decision must be of a political nature and needs to take cognizance of the interlinks with the Portuguese loans to the scheme,” said Bakker.