DA requests urgent briefing on the financial crisis at Eskom

19 January 2015

I have written on Friday to the Minister of Finance, Nhlanhla Nene, requesting an immediate briefing to the Standing Committee on Finance on Treasury's approach to addressing the financial crisis that persists at Eskom.

The press conference on Thursday by Eskom CEO, Tshediso Matona, has made it clear that Eskom faces a major financial crisis. The embattled power utility is grappling with a funding squeeze, which could soon see it pressing regulatory authorities to implement double-digit tariff hikes.

The National Energy Regulator of South Africa (Nersa) has already granted Eskom above inflation electricity price increases over the last six years. These increases were supposed to fund Medupi and Kusile - both of which are now severely behind schedule and above initially estimated costs. 

Eskom cannot be saved by bleeding consumers dry. Electricity tariffs should not lose touch with inflation, and South African consumers should not be expected to pay for the inefficiencies of Eskom. 

Power cuts, which have cost the economy an estimated R300 billion since 2008, have again become commonplace as Eskom scrabbles to stave off a total meltdown of the grid. Extra power outages and increased electricity tariffs will have a serious impact on economic growth and have a negative effect on our ability to create jobs.

This crisis desperately requires urgent and immediate intervention. A briefing to the Standing Committee on Finance by Minister Nene must unequivocally outline how Treasury will tackle the crisis head on, without making ordinary South Africans pay for Eskom's poor planning and complete mismanagement.

It is time for Minister Nene to take action.

Statement issued by David Ross MP, DA Shadow Deputy Minister of Finance, January 19 2015

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