Corruption and criminality are embedded within and around Eskom - Scopa told

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Outgoing chief executive Andre de Ruyter said 9200 MW capacity from renewable energy would come online in the next 18 months. Photo: Archive
Outgoing chief executive Andre de Ruyter said 9200 MW capacity from renewable energy would come online in the next 18 months. Photo: Archive

BUSINESS


The risk of load shedding will be dramatically reduced over the next 18 months as Eskom gets more capacity onboard.

This is according to Eskom’s management during the presentation of its turnaround plan to the standing committee on public accounts (Scopa) in Parliament on Tuesday.

The power utility heavily relies on external power while its own infrastructure remains battered by a lack of skills, lack of money and no time.

Eskom has come under much criticism for failing to keep the lights on, resulting in prolonged periods of load shedding, which decimate businesses, the economy and people’s livelihoods.

 Outgoing chief executive Andre de Ruyter said 9200 MW capacity from renewable energy would come online in the next 18 months.  

“Will it be eliminated? I think it will be a brave person to make that categorical statement, but having regard to our own turnaround plan, and that we’re seeing substantial new capacity, we should see the risk diminish.

“It is important that we do not lose momentum; that we carry on adding new capacity; that we continue to invest in the electricity industry and, particularly, invest in our transmission grid, which is the enabler of adding new generation capacity. It's not only about building new power plants, it's also about connecting the power plant to the consumer. This is what we need to keep on doing.”  

READ: No plan to solve Eskom crisis

De Ruyter spoke about the challenges at Eskom, which included corruption, liquidity concerns and unaligned government policies that make keeping the lights on difficult.

He said corruption and criminality had become embedded within and around Eskom.

He gave an example of the Thuthuka plant, which was targeted by cartels around Standerton.

“We know that if someone has a maintenance contract for mills, then there will be rocks or metal added to the coal to destroy the mills so that there is a maintenance call out. We’ve stopped the theft of R100 million per month of fuel oil at Thuthuka and effected two arrests.

The suspects were released on R500 bail the following day. We had to write off inventory somewhere along the lines of R1.3 billion.”

When we try to impose control by imposing barcoding, those efforts were significantly resisted internally. So, criminality is quite well-organised and deeply embedded. So fixing it is not an easy task. The resistance to implementing pretty basic measures sometimes goes to extraordinary lengths.

He expressed his disappointment at the police's inability to assist. Last year, President Cyril Ramaphosa deployed the army at some of Eskom’s plants following threats assessments.

A minimum of 10 soldiers we placed at four power stations - Thuthuka, Medupe, Majuba and Camden.   

De Ruyter said for the longest time the power utility had advocated for increased law enforcement, increased intelligence gathering and increased assistance in the business.

I found myself in a regrettable position in that I had to approach private donors to run an intelligence to run an operation to gather intelligence on this corruption because of a lack of support from law enforcement agencies.

On liquidity issues, Eskom is very constrained by the lack of payment of its services by municipalities who, combined, now owe the utility R57 billion.

To make matters worse, we cannot just simply switch these municipalities off because of the implications on affected communities.

While some members of the public do pay for services, the majority struggle to do so because of the economic state of the country which has led to high levels of unemployment, poverty and inequality.

De Ruyter said municipal debt remained a perennial problem and had become onerous to the utility.

“Some people do pay their accounts diligently to the municipality but the municipality, for whatever reason, doesn’t pay the money to Eskom.

The responsibility for this should not lie with Eskom, the responsibility should lie with councils and municipalities that do not pay Eskom. Surely, those are people to hold accountable, not Eskom. We have a business to operate, and we have the revenue to collect, and we can’t go to municipalities and collect on their behalf.”

READ: Ramaphosa’s team guns for Gwede

The National Energy Regulator of SA (Nersa) has increased rates by over 30% over a two-year period, which has seen political parties and citizens in an uproar.

Speaking at an ANC conference in the Free State last week, President Ramaphosa said he had asked for the increase to be suspended.

But speaking to a television news channel, Eskom board chair Mpho Makwana seemed to have a different understanding of what they have been requested to do.

Meanwhile, several political parties have come together to challenge the first of the increases which is scheduled to come into effect on April 1.    

Eskom is expected to receive some reprieve as the national Treasury mulls over how much of Eskom’s debt to take onto the sovereign. An announcement is imminent when Finance Minister Enoch Godongwana delivers his budget in less than a month.

De Ruyter said stage 4 load shedding would remain in the evenings this week because of high demand and breakdowns, as well as planned maintenance to make up for deferred maintenance in the past at some of its power stations.

He said if Eskom stopped planned maintenance to alleviate load shedding, that would help for about six months and the country would find itself in the dark again.

The turnaround strategy included increasing the energy availability factor from below 60% where it is currently to around 70% in two years. 


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