Get more Mail & Guardian
Subscribe or Login

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

Vote for an informed choice

We’re dropping the paywall this week so that everyone can access all our stories for free, and access the information they need in the run up to the local government elections. To follow the news, sign up to our daily elections newsletter for the latest updates and analysis.

If our coverage helps inform your decision, cast your vote for an informed public and join our subscriber community. Right now, you can a full year’s access for just R510. Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.

Lameez Omarjee
Lameez Omarjee
Parliamentary reporter at Fin24.com

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

Malema: ANC will use load-shedding to steal votes

While on the campaign trail in the Eastern Cape, EFF leader Julius Malema, without evidence, claimed the ANC was planning to use rolling blackouts to ‘steal votes’

Khaya Koko: The looting isn’t over until the fat belly...

A song about Eastern Cape Premier Oscar Mabuyane preventing looting was way off the mark in a province riddled with corruption and theft

Eskom will try to avoid blackouts during local government elections

Chief operating officer Jan Oberholzer said the ailing state power utility’s staff would be on standby as South Africans cast their votes on 1 November

‘Terribly scary’: Dysfunctional municipalities are a threat to South Africa’s...

The country’s local governments are a drag on investment, a strain on the fiscus and pose a critical sovereign risk
Advertising

press releases

Loading latest Press Releases…
×