Tag: Eskom

By Khulekani Magubane for Fin24

After President Cyril Ramaphosa delivered his State of the Nation Address last week under the shadow of an under-performing economy, Members of Parliament jostled over whether he was confronted by near-impossible odds or complicit in South Africa’s economic quandary.

MPs held the first day of the SONA 2020 debate in the National Assembly on Tuesday afternoon.

Democratic Alliance leader John Steenhuisen said Ramaphosa failed to capitalise on the optimism at the beginning of his presidency, as economic growth slowed, and direct foreign investment dropped along with tax revenues and employment.

“I am not going to stand here and say that this happened on your watch, Mr President. That would be far too kind. It didn’t just happen on your watch, it happened by your own hand. You, sir, put us in this situation,” claimed Steenhuisen.

Ïn Steenhuisen’s view, most of the positive announcements Ramaphosa made during his SONA were merely DA policies that the president co-opted and appropriated as his own.

“Euthanasia is never easy, but sometimes it’s the most humane option. On Thursday night you should have switched off Eskom’s life support machine, and perhaps supported the DA’s electricity plan, which takes power from the state and gives it to the people,” Steenhuisen said.

Steenhuisen said Ramaphosa’s newly announced sovereign wealth fund was only a great idea for a nation that had a healthy budget, citing Norway and Saudi Arabia as examples.

“But we are running a budget deficit and spiralling deeper and deeper into debt. Where will the money for a sovereign wealth fund come from, Mr President? From your own bank account?” Steenhuisen asked.

Speaking after Steenhuisen, Minister in the Presidency Jackson Mthembu sprang to the president’s defence, saying that Steenhuisen could not expect the president to take his policies from the DA’s election manifesto.

Mthembu said Ramaphosa’s SONA speech focused on the energy crisis, youth unemployment, growing the economy and building a capable state.

“We welcome government’s plan to ensure that Eskom works to restore its operational capabilities, while implementing measures that will fundamentally change the trajectory of energy generation in our country such as putting in place measures to enable municipalities in good financial standing to procure their own power from independent power producers,” said Mthembu.

Mthembu added that the government was moving to respond to unemployment, which he said is high because of the “grossly imbalanced structure of the economy”.

This is exacerbated by the skills mismatch that is so prevalent in the country, he added.

By Barbara Friedman for CapeTalk

Eskom’s new spokesperson Sikonathi Mantshantsha has acknowledged that the power utility’s workforce is bloated.

Speaking to CapeTalk radio, Mantshantsha – who was once the utility’s biggest critic – said that after the board changed in 2018, and many of those fingered for mismanagement or wrongdoing were axed or resigned, Eskom had a thorough look at the organisation’s make-up.

“The outcome was that as Eskom, we alone are not able to service this debt of R450-billion. We need the government to come in and pitch in some money.”

This resulted in Minister of Finance Tito Mboweni allocating R69-billion of the budget in three installments per annum. A staff audit was conducted and the outcome was that Eskom had 16 000 people more than was needed.

“The government said OK, don’t touch them. Focus on the power stations,” says Mantshantsha.
“The final call comes from the shareholder in all businesses. And in this case, the shareholder is the government.”

 

Soweto blames non-payment on 1992 accord

Source: 702

Soweto residents have embarked on a protest over electricity cuts by Eskom. The residents blockaded roads and set fire to tyres on Monday morning, causing traffic delays in the area.

The power utility cut off power in Soweto after the municipalities failed to settle their debts. Eskom says it is owed more than R18-billion by the residents.

Soweto residents’ representative King Sibiya says they need a breakdown of the debt from Eskom.

“This is the question we are asking Eskom – if they say we are owing R18-billion, can they Eskom break it down for us?” he said on Twitter.
“Firstly in Soweto, we have plus-minus six malls which are using electricity more than anything, we also have Baragwanath Hospital which is a national hospital, police stations etc.”

Sibiya says they requested a meeting with Eskom but the power utility told them they need the debts to be paid.

Later Eskom conducted an audit on certain parts of the area.

“What we are being charged are estimations, Eskom doesn’t come to our houses and conduct meter readings,” says Sibiya. “In 1992 we signed an accord that the people of Soweto will pay a flat rate of R33.80.”

Meanwhile, Eskom senior manager of customer services in Gauteng Daphne Mokwena says they are not targetting Soweto in particular, but rather residents that are not paying for electricity.

“We are not privy to the 1992 document they are talking about. We have requested via our legal representatives to see the documents but we are still waiting for it. If I haven’t seen it, it does not exist,” she stated.

Responding to meter reading statement, Mokwena says they have been chased out of Soweto when their technicians go there.

She adds when that happens they use the previous meter reading to estimate the following bill.

Eskom goes to court to force tariff hike

Sources: EWN; IOL

The power utility has approached the courts to review the National Energy Regulator of South Africa’s decision to deduct a R69-billion bailout from Eskom’s approved revenue for the current tariff period.

Eskom on Tuesday said it must hike consumer tariffs to avert a complete financial meltdown.

The parastatal said this meant it would need steeper tariff hikes from the approved 8.1% this financial year to 16%.

The energy regulator’s decision to classify government’s R69 billion bailout to Eskom as revenue means Eskom will get less from consumers.

For this reason, the parastatal wants higher consumer tariffs over the next two years.

Eskom’s Hasha Tlhotlhalemaje said that besides increased tariffs this year, it would also need more than the 5.2% hike approved for next year.

“And this 5.23% increase, which 2.2% is accounted for by independent power producers, leaves Eskom with a 3% nominal increase. Now any household, let alone Eskom, cannot function that way.”

She said Eskom remained well aware of the financial situation of consumers but stressed the company needed to be sustainable.

Consumers fight back
By midnight on Monday, when the deadline expired for the public to comment on Eskom’s proposed tariff increases to the National Energy Regulator of SA (Nersa), energy activist group DearSA, sent Nersa over 171 896 comments it had received on its website from consumers.

Energy expert Ted Bloem said: “If we allow Eskom to succeed, we will see a substantial jump in the current tariffs.

As the increase is over and above Eskom’s annual tariff hikes, in reality your electricity costs will double within two years,” he pointed out.

Bloem will be representing the public and opposing the tariff hike application at each official Nersa hearing, to be held in all the provinces.

Loadshedding cost SA R59bn in 2019

New data released by the Council for Scientific and Industrial Research (CSIR) has indicated that South Africa suffered a 2019 loss of between R59bn and R118bn due to loadshedding.

According to the CSIR, the 530 hours of unplanned power cuts during the year occurred at a higher intensity than previous years, including an unprecedented move to Stage 6 loadshedding in December. More energy – approximately 1 352 Gigawatt hours (GWh) – was shed during 2019 than previous years.

The percentage of time that Eskom’s power plants were able to produce electricity was at just 67%.

“Historical fleet EAF decline seems irreversible,” stated the presentation’s authors.

Loadshedding is expected to continue for two to three years, depending on key decisions and actions by government.

The CSIR presentation set out various scenarios for South Africa to ensure the supply of power in the current decade. A key response to start to close the “energy supply gap” is to let businesses, private citizens, mins and farms produce their own electricity.

Prepare for Stage 8, says Eskom

By Mia Lindeque for EWN

Several municipalities have not yet communicated their plan with Eskom should the power company implement stage eight load shedding.

Last month, the utility implemented stage 6 rolling blackouts, which caught residents, businesses and municipalities off guard.

The state-owned entity has since held meetings with municipalities to encourage them to update their emergency plans to make provision for even darker days.

Eskom’s Dikatso Mothae said while the risk of stage eight load shedding was low, municipalities must be prepared.

“In terms of planning purposes, we have to make sure that those schedules are available. We have engaged municipalities, asking that they do the same.”

By Khulekani Magubane for Fin24

Overdue debt owed to Eskom by municipalities increased by some R1.2bn in September to R26.4bn by the end of October, Parliament’s Standing Committee on Public Accounts heard from the inter-ministerial task team aimed at resolving the debt owed to the power utility.

The meeting took place on Tuesday morning in Parliament, along with the top 20 debtors who account for 79% of the total debt. Of these, the top 20 municipalities who owe Eskom money account for 67% of the overall council debt.

Since the inter-ministerial task team was established in 2017, it has met with Eskom at least 40 times, but the debt to Eskom has grown by R16bn.

Scopa, for its part, has decried the lack of progress in reducing the debt owed to the already troubled utility. The last time the committee met to discuss the matter, none of the ministers in the task team showed up. This prompted Scopa to admonish the ministers, especially Minister of Cooperative Governance and Traditional Affairs Nkosazana Dlamini-Zuma, who chairs the task team.

Executive manager at the Department of Cooperative Governance and Traditional Affairs (Cogta) Kevin Naidoo told Scopa that out of a total of 48 valid payment arrangements that Eskom had with municipalities, only 11 were being fully honoured as of October.

Growing debt, fewer payments

“The top 20 payment levels have dropped from a peak of 91% in March 2016 to 31.3% in October 2019, with virtually no payment towards the current accounts over the last 7 months,” said Naidoo.

Among the top defaulting debtors, Maluti a Phofung Local Municipality in the Free State owes a total debt of R4.5bn, R4.4bn of which is overdue.

Emalahleni Local Municipality in Mpumalanga owes a total debt of R3.3bn, R3.1bn of which is overdue. Matjhabeng Local Municipality’s total debt stands a tR2.7bn, of which R2.6bn is overdue.

Eskom chair Jabu Mabuza said despite having over 40 meetings with the inter-ministerial task team, the debt has only grown, meaning that leadership “either misdiagnosed the problems or mis-prescribed the solution”.

“If one looks at this trend, by the end of the financial year, this debt will be at R30bn and this time next year, the debt would be at R35bn. That’s where the direction is heading,” said Mabuza.

Scopa chair Mkhuleko Hlengwa said he and the rest of the committee members were growing weary of meeting over the same issue, only to find with each meeting that the debt crisis had gotten worse than it was before.

By Jan Cronje and Khulekani Magubane for Fin24

Centlec, the Free State utility that provides electricity to customers in the Mangaung Metropolitan Municipality, which includes Bloemfontein, says it will meet with Eskom on Thursday to discuss the paying of its debts.

On Monday Eskom warned that it would interrupt daytime power to three Free State municipalities from December 3 unless they paid their debts or entered into payment plans. They are the Mangaung Metropolitan Municipality, the Mafube local municipality and the Mantsopa local municipality.

In a statement, Centlec spokesperson Lele Mamatu said “everything possible will be done to keep the lights on”.

“Our view is that this matter could have been better handled without causing panic to our customer in general however we are hopeful there’s still a room to can find each other.”

Mamatu said that Centlec has a “good track record of managing its electricity account with Eskom”.

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Eskom, which has a group debt burden of about R450bn, acknowledged on Monday that “indefinitely” stopping the provision of electricity to the three municipalities would cause “undue hardships on consumers”.

It said that, if it cannot enter into agreements with the municipalities, it would withhold electricity for 16 hours per day between 06:00 and 20:00 on weekdays and weekends from December 3, but provide electricity overnight for eight hours.

As of September 2019, Eskom was owed R25.1bn by municipalities countrywide. The warning to the three municipalities comes after National Treasury in November imposed the recovery of billions of rand of municipal debt as one of 28 conditions that Eskom must adhere to in return for a R59bn lifeline. President Cyril Ramaphosa signed the bill granting Eskom the funds last week.

Nampak CEO to run Eskom

By Samkelo Mtshali for IOL

The appointment on Monday of Nampak Chief Executive Officer Andre de Ruyter as the new Eskom CEO has been met with mixed reactions from the political sphere, with the Economic Freedom Fighters particularly displeased with his appointment at the power utility.

The embattled state entity has not had a permanent CEO since the resignation of Phakamani Hadebe in July, with board chairperson Jabu Mabuza acting in the role of CEO since Hadebe’s resignation mid year.

The EFF said that Ruyter’s appointment was anti-transformation and racist and that his appointment was part of a ‘racist project’ by Public Enterprises Minister Pravin Gordhan to undermine Africans.

“This racist project does not seek to undermine Africans as far as it concerns management of SOEs but as important role players in the economy. It seeks to reinforce the falsehood that Africans cannot manage strategic and complex institutions.

“The other false that must be dismissed with the contempt it deserves is the idea that Africans are inherently corrupt. Since his appointment as Minister of Public Enterprises, Pravin has been removing African managers in SOEs in favour of non-African male, some even less qualified or less experienced compared to the removed African managers,” said EFF spokesperson Mbuyiseni Ndlozi.

The National Union of Metalworkers of South Africa (NUMSA) general secretary Irvin Jim said that de Ruyter’s appointment did not do anything to aide transformation in the country and that the union regarded the appointment as “nothing less than a provocation”.

“This constitutes a setback when it comes to the transformation agenda in the country. This is an insult to blacks and Africans in this country that to date in this country since the democratic breakthrough we do not have competent black women and black Africans who can occupy such a position,” Jim said.

Democratic Alliance Chief Whip in Parliament Natasha Mazzone said that de Ruyter had a mammoth task ahead of him and said that he should use his experience to set Eskom on the right course to recover.

“De Ruyter has an unenviable task ahead of him and his priorities should include stabilising Eskom’s mammoth mountain of debt as well as ensuring a secure electricity grid for the nation.

“Of course, the only way we can truly achieve an efficient Eskom and an energy secure South Africa is when we break the utility’s monopoly over the energy sector as set out in the DA’s Cheaper Electricity Bill,” said Mazzone.

She added that de Ruyter should remain independent and beyond reproach in his capacity as Eskom CEO and that the DA would “keep a close eye on the developments at Eskom under his leadership” in the hope that he will always act in the best interest of Eskom and the public.

Inkosi Mzamo Buthelezi, the IFP’s spokesperson on Public Enterprises, said that although de Ruyter will only officially begin his term on January 15 2020 he should “make very good use of the following month in order to familiarise himself with Eskom”.

“There is very little time to turn things around at the ailing parastatal, de Ruyter must hit the ground running,” Inkosi Buthelezi said.

Amongst some of the key issues that Inkosi Buthelezi said de Ruyter should focus on was building bridges with all stakeholders, decrease debt and reign in unpaid bills, renew or advertise contracts and strengthen supply chain management and tender procurement and financial controls.

By Lameez Omarjee for Fin24

A flat rate for electricity could help foster a culture of payment among Soweto residents, a local councillor told Fin24.

Soweto ANC councillor Mpho Sesedinyane believes a proposal for a R150 monthly flat rate for electricity could be a starting point to address the country’s non-payment woes. The flat-rate proposal was the brainchild of the South African National Civic Organisation – a non-political organisation which advocates on behalf of communities in engagements with government and other service providers.

Soweto owes Eskom almost R20bn – almost half of the total local municipal debt owed to the electricity utility.

Eskom has started disconnecting power to thousands of Soweto households as a consequence.

The now famous couple from the KFC proposal viral video went on their first outing to the Sowetan Derby on Saturday. (Video supplied by KFC)

Sesedinyane said the culture of non-payment dates back to apartheid when residents were told not to pay for public services as an act of resistance.

“Our people were told not to pay for services, not to pay for electricity,” Sesedinyane said.

The ruling ANC had not come back to residents to communicate it was noble to pay for services, after taking over in 1994, he said. Some residents can afford to pay, but are stuck in the old “mentality” and are still resisting payment, he added.

“We need to bring them back and say, we have won the country now. It is us [the ANC] that are governing now, can we now start to contribute and pay Eskom,” Sesedinyane said. These views have previously been expressed by president Cyril Ramaphosa and his deputy, David Mabuza, among others.

Sesedinyane believes the introduction of a flat rate could be a starting point to create a culture of payment for services.

“We had to agree (with Sanco) to come up with this project. For Eskom to collect revenue, it is important to start somewhere,” he said. That starting point is a flat fee of R150 households should pay per month for electricity.

If a flat rate of R150 is introduced, Eskom would at least generate some kind of income, which is better than none at all, he suggested.

Sesedinyane explained that the majority of Soweto residents are unemployed, living below the poverty line and are reliant on social grants. This means they are unable to pay for electricity.

The flat rate should be set at an amount which everyone can afford, including grant beneficiaries. After three or four years the flat rate can be increased, and at that point people will be used to paying for electricity, he added.

“People will then be in a position to know it is noble to pay for services, especially electricity. And they will be used to paying at the end of the day.”

Sesedinyane said that prepaid meters will not be the solution. “Our people will start connecting themselves illegally and they will not pay for electricity.”

Not sustainable

The South African Local Government Association – an association comprised of 257 local governments – however does not think that a flat rate would work. Spokesperson Sivuyile Mbambato told Fin24 that the proposal was “unsustainable”.

“We do not have the luxury of cheap and excess electricity like we did more than 20 years ago. Everyone must pay for what they use,” he said.

Salga is supportive of a prepaid solution. “Prepaid will be the answer in Soweto and other townships but the residents still reject that. This is an indication of how deep is the culture on non-payment in our communities,” said Mbambato.

The association’s National Executive Committee met last week to discuss solutions for rising municipal debt, among other issues.

The NEC resolved that a two-phased approach be implemented to address rising debt, according to a statement issued by Salga last week.

Phase 1 puts forward stricter enforcement by municipalities on credit control measures. This means municipalities will have to target government properties and businesses, through disconnection if there is “sufficient merit” in line with their credit control policies, the statement read.

Phase 2 involves an analysis of debt to classify debt which must be written off, or is realistically collectable.

The proposal comes after a period in which Salga interacted with various parliamentary portfolio committees on matters relating to debt owed by municipalities.

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