Tag: power

Debt and corruption scandals at Eskom Holdings SOC Ltd. make the utility the biggest risk to South Africa’s economy and the government needs to replace its management, Goldman Sachs Group said.

Eskom plans to raise almost R340 billion ($26 billion) in the next five years, while meeting R413 billionof interest and debt repayments, which amount to 8% of South Africa’s gross domestic product.

The utility is caught up in allegations of corruption related to contracts it signed with companies linked to the Gupta family, who are friends of President Jacob Zuma. It’s also without a permanent chief executive officer and has suspended its finance director. Zuma and the Guptas deny any wrongdoing.

“We are having discussions on solutions,” Colin Coleman, a partner of Goldman Sachs and head of sub-Saharan Africa, said in an interview in Johannesburg on Thursday, without elaborating.

“Government has got to put the governance in place and clean it out. It needs a permanent credible, independent non-conflicted chairman and a credible board and from that, credible managers.”

The New York-based lender in 2015 provided informal advice to the South African government on the sale of state assets to raise money for Eskom and proposals on how to improve the utility’s cash flow, people familiar with the matter said at the time.

Eskom faces lower demand, with South Africans last year using the least amount of electricity generated by Eskom in more than a decade.

The utility is also spending billions of dollars on new power plants that are years behind schedule and over budget. The company disclosed R3 billion of irregular expenditure in its financial results on July 20, a figure which its auditors said they couldn’t independently confirm.

“Eskom is the biggest single risk to the South African economy,” Coleman said.

“If you strip out corruption and sort out procurement, I’m sure there are efficiency gains there. There are self-help initiatives that can deliver a company that’s a lot more efficient. You’ve got to incentivize efficiency.”

The South African government, which saw its budget deficit widen to 92.2 billion rand in July, is hamstrung by an economy that’s barely growing, political infighting, and losses at other state-owned companies such as South African Airways.

Two ratings agencies cut South Africa’s foreign debt to junk in April, citing the firing of former Finance Minister Pravin Gordhan at the end of March and poor governance at state-owned enterprises.

Eskom, which has used R218.2 billion in government guarantees, hasn’t held a public auction for its debt in South Africa since 2014, relying on development finance institutions and export credit agencies for loans.

The power utility is confident it can reduce its dependence on the government by targeting funding sources that do not require explicit guarantees, the power utility said in an emailed response to questions.

“Eskom continues to access various debt markets, which include funding from development finance institutions, domestic and international bond issuances, funding supported by export credit agencies as well as short-term commercial paper bill issuances,” the company said.

Source: Bloomberg

Eskom extinguishes independent power producers

Energy minister Mmamoloko Kubayi shocked the private power industry by announcing that all previously-negotiated power tariffs must be lowered to 77c per kWh, and has left companies reeling, reported the City Press.

The minister acceded to Eskom’s decision to only accept contracts where the cost of energy was below 77c per kWh, affecting 27 energy projects representing over R60-billion.

Mark Pickering, managing director of solar industry lobby group Sapvia, told the City Press there is no legal basis for the decision and attempts to reach out to the minister have failed due to her schedule.

“The minister drops this massive bombshell, then promptly leaves for China. After that, we are told, she is on leave for two weeks,” Pickering told the City Press.

Pickering said Eskom is clearly attempting to squash the renewable energy Independent Power Producer programme and the minister has bought Eskom’s story “hook, line, and sinker”.

The announcement of the tariff requirement follows recent news that many municipalities owe Eskom up to R12-billion, which has resulted in the provider threatening power cuts – due to unmet payment agreements.

Eskom has also been plagued by multiple scandals, including its executives being accused of corruption and mismanagement.

Source: My Broadband

Big Tech can no longer be allowed to police itself

In the early days of the commercial Internet, back in the mid 1990s, one of the things that technology platform companies lobbied hard for was the notion that they were like the town square – passive conduits for the actions of others, facilitating a variety of activities and thoughts, but not responsible for any of them.

The idea was that the garage entrepreneurs starting message boards and chat rooms, or the nascent search engines, simply did not have the legal or economic bandwidth to monitor or be liable for the actions of users, and that to require them to do so would stymie the development of the internet itself.

How times have changed. Not only can the largest Internet companies like Facebook and Google monitor nearly everything we do, they are also policing the net with increasing vigour. Witness the variety of actions taken by Facebook, Google, GoDaddy and PayPal, in the wake of racially charged violence in Charlottesville, to block or ban rightwing hate groups from their platforms.

You can argue that this is laudable, or not, depending on your relative concern about hate speech versus free speech. But there’s a key business issue that has been missed in all the hoopla. It is one that was summarised well by Matthew Prince, the chief executive of Cloudflare, a web-infrastructure company that dropped the rightwing Daily Stormer website as a client, under massive public pressure and against the firm’s own stated policies. “I woke up in a bad mood and decided someone shouldn’t be allowed on the internet,” said Mr Prince following the decision. “No one should have that power.”

Powerful tech companies do. Yet they also continue to benefit, in the US at least, from laws that treat them as “special” and allow them to get around all sorts of legal issues that companies in every other kind of business have to grapple with. This amounts to billions of dollars in corporate subsidies to the world’s most powerful industry.

The golden goose is a little-known bit of Federal Trade Commission legislation. Section 230 of the Communications and Decency Act (CDA) was crafted in 1996 to allow tech firms exemption from liability for nearly all kinds of illegal content or actions perpetrated by their users (there are a few small carveouts for things like copyright violations and rare federal criminal prosecutions). In recent years, the tech industry has thrown a tremendous amount of money and effort into ensuring that it maintains section 230 as a “get out of jail free” card.

But this law is being challenged by powerful politicians. On August 1, a bipartisan group of senators, led by Democrat Claire McCaskill and Republican Rob Portman, introduced legislation that would create a carve-out in section 230 for tech firms that knowingly facilitate sex trafficking. The impetus for this was the horror of backpage.com, a firm that actively created a platform for online sex trafficking for its own profit.

It is a piece of legislation that everyone, it seems, can get behind – except the largest tech companies and their industry lobbying groups . They are concerned that it would open a Pandora’s box of legal issues for them. These groups had the rough copy of the bill for months before its introduction, yet refused to offer edits during its crafting. Keith Smith, a spokesperson in Mr Portman’s office, says: “We did our due diligence, met with the tech community on a bipartisan basis for months and yet they offered no constructive feedback.”

The firms say that is because any amendment to 230 is a no-go; they suggested alternatives like tougher criminal laws. Noah Theran, a spokesperson for the Internet Association, a trade group that represents companies such as Google and Facebook, says: “The entire internet industry wants to end human trafficking. But, there are ways to do this without amending a law foundational to legitimate internet services.”

Still, Big Tech realises the cognitive dissonance involved in censoring online activity while continuing to portray itself as the town square. See, for example, the recent Electronic Frontier Foundation statement fretting about the slippery slope of censorship. The industry simply does not have the ability, or the right, to self-police any longer. In a world where Big Tech has the power not only to fan the flames of hate speech and fake news, but also remove it when and where it likes, it is clear that the internet is a fundamentally different place than it was in 1996 – one that needs fundamentally different rules.

The conversation about what those rules should look like is heating up. Olivier Sylvain, an associate professor of law at Fordham University, notes that as the business model and power of technology change and grow, so too should the law.

“The concept of immunity in 230 as originally conceived is no longer relevant in a world in which the largest tech firms are engineering an environment in which they can extract all kinds of information about users for their own profit,” says Prof Sylvain. He recently proposed that the CDA be recrafted to “shield providers from liability for third-party user online conduct only to the extent such providers operate as true passive conduits”.

Regulators and politicians, take note: Big Tech should no longer have its cake and eat it too.

By Rana Foroohar for the Irish Times 

Africa the superpower

What a difference a century makes. If we stepped back in time to a hundred years ago we’d find an undeveloped China; a Middle East that had yet to discover the riches of oil and most of Southeast Asia consisted of countries that were barely distinguishable from medieval societies. It was an entirely different world.

Roll back two hundred years and many European nations would be far removed from the modern countries they are today. It is an enduring myth that fools us to believe everything has always been like it is today; that the societies at the top of the pile have always been there. Technological and social revolutions have molded the modern world and opportunity is out there for the taking.

When asked why I am so optimistic about Africa my answer is simple: look at how far we have come and look at how fast we are moving forward.

By 2050, it is estimated that Africa will boast a $29-trillion economy. It will have the largest youth labour market in the world and if guided and educated correctly, the same youth will be the workforce of that world.

Even today, the future is starting to glow in Africa. Many projects and initiatives are delivering and being joined by new catalysts every day. According to Jake Bright, co-author of The Next Africa: An Emerging Continent Becomes a Global Powerhouse, there are already over 200 innovation hubs on the continent, 3,500 tech-related ventures and $1 billion in venture capital injected into local start-ups.

Africa is modernising at an unmatched rate. Its tremendous mobile device adoption proves this fact. African companies and people simply accept that new technologies will improve their lives and if what they need does not exist, they will create it. From new solar power systems to the much-celebrated M-PESA mobile banking, Africa innovates at the edge. While other countries wonder about delivering packages with quadcopters, we are already pioneering intelligent drone systems sophisticated enough to track poachers. It was an African student who developed a new rocket fuel – in his mother’s rural kitchen!

This culture of innovation leapfrogging is one of Africa’s secret weapons, supported by a rising tide of SMEs. Though policy and leadership have been slow to respond, we hear new voices promoting SME and innovation cultures every day. Rwanda, for example has reduced new business registrations from over 18 days to as little as 6 hours through a series of reforms that include technology and paperless processes. As a result, more companies were registered there in 2009 than the total five years before that – and it keeps growing. Skills are central to Africa’s future and I see a lot of promise in the growing pool of related projects across the continent. Technology skills are being brought to schools everywhere with innovations including container classrooms and maker hubs. Tertiary skills are also being reinforced through partnerships with universities, as well as award-winning programmes such as SAP Africa’s Skills for Africa and Africa Code Week, the latter which trained over 86, 000 youngsters in basic coding skills last year.

But this is not a services revolution. Africa’s resources and agriculture remain important. They benefit acutely from innovation. One example is the partnership between SAP and GIZ, developing systems used by cashew farmers in Benin, Burkina Faso, Côte d’Ivoire, Ghana, and Mozambique to better manage their supply chain.

Thanks to the continent’s demand for hardy and meaningful technology, which is being driven by partnerships that reinforce Africa’s role in creating a better world, Africa is where others will look for the best in new innovation. The SAP Rural Sourcing Management solution is one direct result of this. Refined on African farms, it will serve as a blueprint to meet agriculture and food challenges across the world.

I believe that Africa will emerge to be the third centre of global power, settled in between the worlds of the East and West. The world needs Africa. It needs its resources, its people, its skills and its insights and Africa is rising to meet those expectations. Yes, it has not been a smooth ride, but the winds of change are blowing in the right direction. This will be Africa’s century.

By Brett Parker, MD of SAP Africa

Follow us on social media: 

               

View our magazine archives: 

                       


My Office News Ⓒ 2017 - Designed by A Collective


SUBSCRIBE TO OUR NEWSLETTER
Top