Nersa mulls own probe into Eskom's 'governance failures'

State-owned enterprises are pivotal to economic growth, but what will their role in SA be in 2019?
State-owned enterprises are pivotal to economic growth, but what will their role in SA be in 2019?

Eskom acknowledged "certain governance" failures occurred at the power utility but the amounts associated with these have not yet been fully quantified, Nersa chairperson Jacob Modise has said.

The regulator also suggested a possible investigation of its own into Eskom.

Modise was addressing journalists at a briefing on the new electricity tariffs on Thursday. 

Nersa could decide to investigate the governance failures at Eskom and adjust Eskom’s revenues accordingly, according to Modise.

Deadline

The regulator also made several proposals to improve Eskom’s operational efficiencies.

Modise said that Eskom should cut costs and provide Nersa with a plan to do this within six months, reduce unplanned outages and trips, lower water usage and develop a detailed maintenance plan.

He added that Eskom should also reduce the frequency of load shedding and give the regulator a detailed update about the build programme failures at the new power plants, Medupi and Kusile, which have seen massive cost overruns and delays.

Nomfundo Maseti, a regulator member of the electricity sub-committee, said Nersa would not wait for other authorities such as the Hawks to act on allegations of fraud at Eskom as it has its own powers of investigation according to the Electricity Regulation Act.

She said the timelines and terms of reference for the probe would be announced soon.

The Zondo Commission of Inquiry has been hearing testimony from Eskom chairperson Jabu Mabuza and other officials about graft at the power utility.

Nersa made the announcement on Thursday in Pretoria, following Eskom's application for price hikes of 17.1% for 2019/20, 15.4% for 2020/21 and 15.5% for 2021/22.

The requested increases were largely opposed by business, labour and civil society in written and oral submissions. The regulator received 119 000 written comments on Eskom’s application and held public hearings in seven out of the nine provinces, Modise said.

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