/ 7 May 1999

ESKOM IN CAHORA BASSA DISPUTE

ESKOM and the operators of Mozambique’s Cahora Bassa hydroelectric dam are seeking international arbitration over a tariff dispute, a spokesman for the operating company said Tuesday. Portugal’s Hidroelectrica de Cahora Bassa (HCB), wants to increase a 1988 tariff of two US cents per watt, but Eskom does not agree. HCB insists that the tariff is out of date and must be increased if the company, heavily affected by a 16-year civil war which ended in 1992, is to be remain profitable. The rehabilitation of the 900 kilometre power line to South Africa was completed more than a year ago, but HCB has allowed no electricity to flow to the South African grid due to the disagreements with its traditional client. The only consumers at the moment are Mozambique itself and neighbouring Zimbabwe.