/ 15 April 2015

Expect winter load shedding, says Lynne Brown

Minister of Public Enterprises Lynne Brown plans to appoint a chartered accountant and expand Eskom's board to include members with 'fiduciary' skills.
Minister of Public Enterprises Lynne Brown plans to appoint a chartered accountant and expand Eskom's board to include members with 'fiduciary' skills.

Load shedding could be expected to continue through the winter period of high electricity demand as necessary maintenance on Eskom’s plants needs to be carried out, Minister of Public Enterprises Lynne Brown told a media briefing on Wednesday afternoon.

Maintenance during the winter months is a deviation from normal practice at Eskom. 

Brown expects clarity on the so-called Deep Dive inquiry into Eskom’s financial troubles in the near future and the name of the accounting and forensic inquiry firm conducting the inquiry should be announced shortly.

Brown acknowledged that Eskom was spending R1-billion a month on emergency diesel supplies and that this had already used up the R8-billion profit the state-owned energy utility announced in its interim financials at the end of last year. She is expecting the Deep Dive report within three months. The high cost of coal and diesel supplies to Eskom’s power plants is expected to be among the issues investigated.

Brown said she had no idea why Eskom was appointing middlemen suppliers and being charged more than the going rate for diesel, in particular. The minister promised to sort out troubles on the Eskom board shortly, following the resignation of chairperson Zola Tsotsi.

She intended to appoint a chartered accountant and expand the board to include members with “fiduciary” skills. In the meantime, former SABC chairperson Ben Ngubane remains acting chair of the entity. 

“The board stabilisation does sit with me. What I want to do in the next couple of weeks is strengthen the board …  [and] bring more people on to the [10-member] board,” said Brown. She joked that she was keen to appoint financially literate people such as “an auntie from the Cape Flats” who had money sense and could make “R30 last the whole week”.

Addressing a briefing at Parliament, Brown took care to apologise to the nation for load shedding. “I wish to, on behalf of government, apologise for the inconvenience anyone has suffered due to load shedding and would also like to thank all citizens and consumers for their patience and understanding, but also for assisting us in the many creative ways to lift pressure off the grid.”

BEE ‘not the root cause’ of pressure
Brown said there was a suggestion from at least one pundit that costly black economic empowerment private-sector contracts were the root cause of cost pressures – and supply problems – at Eskom. But she argued that this was an unlikely reason for the power utility’s woes.

“We are having load shedding because our plants are ageing,” she said, noting that the coal-fired Medupi and Kusile plants were running behind schedule. “Medupi is taking longer than [it was] supposed to … Kusile is taking long [to come on line].”

Referring to the cost of diesel in particular – which is only supposed to be used in high peak demand times at the beginning and end of the day – she said she too had wondered why the costs were so high.

While diesel payment is “an operational matter”, falling outside of her responsibility as minister, it is one of the key issues she wants the Deep Dive inquiry to investigate. When pressed on why diesel was not bought directly from the normal suppliers, she said this was “a problem for me [too] … I also wonder why you [Eskom] can’t buy it [the diesel directly] yourself”.

Regarding the war room led by Deputy President Cyril Ramaphosa, she said it had done work on stabilising Eskom’s finances, including the R23-billion injection treasury had promised Eskom.

The war room is looking at the matter of converting from diesel- to gas-driven power stations and is getting a handle “on the maintenance issues” at Eskom. 

Of importance is to avoid a total blackout. Stage three load shedding is an indication that Eskom acknowledges the seriousness “that we face … but it is in no way an indication that we are near a total blackout”. 

South Africa was hit by unplanned power outages after 9 500 MW was cut from the grid on Tuesday. This was in addition to planned outages of 5 000 MW.