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Busa raises concerns about Eskom

Business confederation Business Unity South Africa (Busa) has urged Eskom to take up its offer of engaging with business to find alternative ways to improve its sustainability, spurred by concerns that the struggling power utility may request an interim tariff increase. 

Busa has also expressed concern at the delay in the finalisation of the Independent Services and Marketing Operations Bill, which it said could open the way for independent power producers to be more active.  

Busa’s appeal to Eskom followed comments at a conference in Cape Town on Tuesday by the power utility’s group executive for transmission, Mongezi Ntsoloko, that the decision by the National Energy Regulator of South Africa (Nersa) to grant an 8% increase had “dire” consequences for the power utility. Eskom had requested an 18% increase. 

Ntsoloko told delegates at African Utility Week that projects which did not impact on Eskom’s power supply had been delayed and that they had reduced manpower at the utility. He said the company was looking at ways to improve productivity. 

Ntsoloko said Eskom had not applied to Nersa to reopen the tariff determination process, despite rumours that the regulator was considering an interim tariff increase. 

Above-inflation increase
Busa, concerned that the country could not bear an above-inflation increase of electricity prices, said it was not convinced that Eskom had explored sufficiently alternative funding models.

“The SA economy is struggling to be competitive in the face of improving competitiveness on the part of our competitor countries. We thus need to put strong minds together to develop a sustainable long-term solution to our energy needs, including consideration of more private-sector involvement in developing alternative supply and demand-side mechanisms,” said acting chief executive Cas Coovadia. 

He said Busa had approached Eskom during Brian Dames’s tenure to assist the utility at a strategic level to explore “creative and innovative mechanisms to improve the sustainability of Eskom”. 

Coovadia said they would approach the power company after it had appointed a permanent chief executive. 

“We are concerned about the delay in this appointment, which does not demonstrate that Eskom is a critical state-owned enterprise that needs sound leadership and certainty,” he said. “We urge government to expedite the appointment of a CEO.” 

Ntsoloko told the conference that Eskom was looking to other sources to ensure security of power supply.

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