DA calls for parliamentary briefing on Eskom crisis
09 December 2015
I will write to the Chairperson of the Public Enterprises Committee, Ms Dipuo Letsatsi-Duba, requesting that she urgently call for a sitting of the Committee, and summon Minister Lynne Brown and Eskom CEO, Mr Tshediso Motana, to brief the Committee on the latest financial crisis at the cash-strapped Eskom. Given the urgency of the matter, the Committee needs to sit before Parliament opens on 12 February 2015.
In a report, Public Enterprises Minister Brown is quoted as saying "Eskom will run out of money by the end of January" (see M&G article).
The Committee should compel the Public Enterprises Minister and the Eskom CEO to take immediate action and to finally acknowledge that South Africa is on the brink of a crisis, which, without decisive action, will plunge South Africa into darkness.
It is clear that the Executive and Eskom are not giving the public the full truth of the crisis at Eskom.
In 2014, Eskom was given a R20 billion bailout by Treasury in order for the power utility to meet the day-to-day electricity needs of households and businesses.
It appears that this bailout has been funding the use of diesel-generated power, which costs R3 per kilowatt hour, compared to coal-generated power, which costs far less, at 62 cents per kilowatt hour. The use of diesel, is the result of making up for the kilowatt shortfall.
The use of diesel power generation is supposed to be a temporary measure, as the generators are designed to run for 3 hours at a time, but due to the large shortfall, they have been running for up 12 hours. Furthermore, the generators are being put back online without adhering to international best practice of inspecting the turbines, as Eskom does not have time for this.
If Treasury does not use taxpayers' money to again bailout Eskom then South Africa faces a perpetual series blackouts. If Treasury does grant the state-owned company a bailout, then a downgrade by ratings agencies is very likely.
Eskom has gone from bad to worse, while South Africans and the economy suffer.
The financial crisis at Eskom vindicates the DA's position that the generation of South Africa's power must be broadened to include independent power producers.
We therefore call on the Minister of Public Enterprises to recommend that President Jacob Zuma sign the Independent System and Market Operator (ISMO) Bill in order to facilitate this process.
It is clear that Eskom's and Government's laissez-faire approach is not working and leadership is needed.
Statement issued by Natasha Michael MP, DA Shadow Minister of Public Enterprises, January 9 2015
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