Corruption, state capture behind Eskom’s downfall, Nersa hears

Political meddling, state capture and corruption at Eskom were among the players leading to the power utility’s crisis, the National Energy Regulator of South Africa (Nersa) heard on Monday.

The regulator kicked off its nationwide public hearings, for two tariff applications, in Cape Town. Eskom wants a 15% increase in tariffs for the next three years, as well as an increase to recover losses made in the 2017/18 year.

READ MORE: Is the load-shedding holiday over?

Executives from Eskom made submissions, as did civil society groups.

Ronald Chauke, portfolio manager on energy for the Organisation Undoing Tax Abuse, said that although Eskom brought about its own downfall, there were other factors, such as corruption and state capture, which worsened the situation.

He said members of the public were paying the “ultimate price” for the maladministration and corruption which took place at the entity. “Eskom is going nowhere until Eskom changes the way it does business.”

Chauke called for the new leadership to act urgently in addressing the business model.

Ted Blom of Mining and Energy Advisors called for Nersa to probe the entity. This would be in addition to probes by the Special Investigations Unit, Parliament and the Zondo commission of inquiry into state capture. Blom believes Nersa would conduct an investigation focusing on price manipulation.

Loss of confidence

He also argued that the entity was struggling to get capital from markets because they had lost confidence in Eskom, and not because of poor financial ratios.

Earlier on Monday, chief financial officer Calib Cassim and CEO Phakamani Hadebe highlighted that Eskom’s balance sheet was poor and affected its ability to secure long term bonds from the market.

Carl Braam Opperman, CEO of Agri Western Cape, also made submissions on the impact of the tariffs — which are higher than inflation — on the agriculture sector.

READ MORE: Your guide to surviving 2019

He said a sharp increase in electricity prices would place cashflow in the agri-sector under pressure, as electricity is a major cost contributor to agriculture.

Farms spent R7-billion on electricity in 2017. The 15% increase over three years, including the tariffs for the regulatory clearing account, will push up cost to R11-billion, which the sector cannot afford, said Opperman. — Fin24

PW Botha wagged his finger and banned us in 1988 but we stood firm. We built a reputation for fearless journalism, then, and now. Through these last 35 years, the Mail & Guardian has always been on the right side of history.

These days, we are on the trail of the merry band of corporates and politicians robbing South Africa of its own potential.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Lameez Omarjee
Lameez Omarjee
Parliamentary reporter at Fin24.com
Advertisting

SABC sued over ‘bad’ clip of Ramaphosa

A senior employee at the public broadcaster wants compensation for claims of ‘sabotage’

Soundtrack to a pandemic: Africa’s best coronavirus songs

Drawing on lessons from Ebola, African artists are using music to convey public health messaging. And they are doing it in style

In East Africa, the locusts are coming back for more

In February the devastating locust swarms were the biggest seen in East Africa for 70 years. Now they’re even bigger

Western Cape Judge Mushtak Parker faces second misconduct complaint

The Cape Bar Council says his conduct is ‘unbecoming the holding of judicial office’

Press Releases

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world

SAB Zenzele special AGM rescheduled to March 25 2020

New voting arrangements are being made to safeguard the health of shareholders

Dimension Data launches Saturday School in PE

The Gauteng Saturday School has produced a number of success stories