While the Organisation Undoing Tax Abuse (OUTA) welcomed the fact that president Cyril Ramaphosa returned home early from Egypt to address the worst electricity crisis in recent South African history, it says in a statement that the time for clear and meaningful action on Eskom and the developing energy crisis is long overdue.
“We are calling for a serious relook of the security of our electricity supply, especially in the light of President Ramaphosa’s statements that this week’s load shedding can partly be blamed on sabotage. If indeed there was sabotage, we need to ask how this is even possible. Furthermore, those found guilty of sabotage must be criminally charged and prosecuted, as sabotaging a national electricity network could surely be seen as an act of treason,” says OUTA’s parliamentary adviser and well known energy activist, Liz McDaid.
OUTA says action against those who initiated the crisis at Eskom, is also long overdue. “This week we heard of excuses ranging from wet coal to excessive boiler tube leaks, problems with cables at Medupi power station, plants such as Camden & Kriel having been flooded and bad weather. But when will action be taken against those who allowed years of maladministration, conscious decisions to reduce maintenance and other governance issues that have crippled Eskom? Despite substantive evidence implicating individuals like Brian Molefe, Ben Ngubane, Anoj Singh and Matshela Koko in dubious conduct which ‘captured’ the SOE, we are still waiting to see accountability and real consequences.”
OUTA furthermore notes with dismay the blame shifting displayed by the minister of Mineral Resources and Energy, Gwede Mantashe, who yesterday said South Africans should not blame him for Eskom’s problems. Mantashe said Eskom falls under the Public Enterprises Minister Pravin Gordhan, who should be blamed.
“While it is true that Eskom as an entity falls under Gordhan, minister Mantashe is in charge of the energy portfolio and has been delaying the Ministerial Determination for the new generation capacity procurement as per the recently approved 2019 IRP. Given that Eskom is evidently struggling to meet the existing electricity demand, minister Mantashe should stop the blame game and work towards a solution for the country’s worsening energy crisis. It is time for those in government to put aside personal and political agendas and put South Africa and its people first.
OUTA says that Eskom’s unprecedented stage-6 load shedding happened to coincide with the announcement of their Regulatory Clearing Account (RCA) application to NERSA for further electricity tariff hikes, which ‘allows’ Eskom to recover revenue target shortfalls or excess expenses in a given financial year. This is done under the auspices of the multi-year price determination (MYPD) methodology which makes provision for a reconciliation factor to claw back these shortfalls through future tariff hikes.
“How much more can Eskom expect to squeeze out of their hard-pressed consumers?” asks McDaid. “This week saw ferrochrome smelters, mines and other intensive energy users being instructed to halt their operations, culminating in more than 12-hours production losses. Other industries and many businesses were also unable to operate, and this debacle has the potential to lead to further job losses and push South Africa into an economic recession. Despite this, Eskom wants more money from consumers.”
OUTA adds that it is concerned that the issue of securing the nation’s electricity supply is not receiving the highest priority and collaborated attention of those in power. “Eskom, the Department of Mineral Resources and Energy, NERSA, the Department of Public Enterprises, National Treasury and the National Planning Commission should now put aside their differences and work together to find a speedy solution. We need finality on regulations to enable more generation capacity from Independent Power Producers (IPP) and short-term technical difficulties to be ironed out.”