Tag Archive | 2013

Eskom- the elephant in the room…

For weeks now Parliament has been listening to a litany of warnings from Brian Dames, CEO of Eskom, and Paul O’Flaherty, financial eskom logodirector, on the necessity to maintain a rock solid balance sheet to the outside world, particularly the banking and loan sector, in order to secure and maintain loans by Eskom subject to favourable considerations by the rating agencies.

This is important, they say, in order to ensure electricity rates at a revised figure, carved down from what was originally asked for to a much lesser 16% increase per year for five years and which is now proposed to the national energy regulator (NERSA), supported by the department of energy (DOE).

The whole application is termed the third of the multi-year price determinations known as (MYPD(3), given the love of acronyms in the energy world but not so loved it seems during the hearings being conducted by NERSA around the country.

In fact, the deep distrust of Eskom and the possibility that they are not working in the national interest of the consumer but rather their own has become almost a theme of those taking the podium to express their displeasure at constantly increasing electricity prices.

It all goes back to a simple question asked by an MP in Parliament during the explanation given by Eskom to the energy portfolio committee on the reasons for their MYPD(3) application.   “Why”, asked the MP,  “did Eskom on the one hand try and run its business like a commercial giant when in fact it is a state utility providing a service to the consumer and presumably not trying to make a profit at the expense of the consumer?”

The retort from Eskom was that any failure to get loans without a strong balance sheet would result in even higher electricity rates. But is this really true many have asked during the current NERSA hearings.  Is it a question of credit agency ratings or the need to show profits that is driving the Eskom bid for 16% increase at least per year?

Energy Intensive Users Group who are responsible for 44% of electricity consumption say that in their calculations, Eskom needs only 10% at most.

In Cape Town, National Union of Miners said succinctly, “Consumers should not be punished for policies of the past and NUM questioned whether a “R46bn shareholder return was justifiable for a state company.”

In reality, there is no doubt that Eskom does not consider itself a state utility, or at least it certainly does not act like one. A reading of their website quickly clears up any doubt on that issue, the language of the site painting a solid picture of competence and financial strength to the world in general.

In fact the financial problem for the country is what can the foundries that are going insolvent, the struggling businesses facing imponderables and the ordinary citizen facing unheard of monthly municipal accounts, do about an organisation determined to make the kind of profits that give good sleep to bank managers only.

Quite clearly, this scenario will have to be played out before Budget day.

++++++++++++++++++++++++++++++++++++++++++++++++++

NA smallWith Parliament now open, parliamentarians already at work in some of the committees and training in progress for the new MPs, the State of Nation Address is now scheduled for 14 February, followed by a week of debate, the President’s response being on the 21 February and the Budget set for 27 February.

Parliament of South Africa 20.12.2012

This is a public participation, non-profit site. Please contribute by using our blog follow e-mail address, comment facilities, Facebook or Twitter to advise of any useful, informative, correctional, or interesting and associated information. Editor retains the right to use or publish.

Posted in Electricity, Energy, Finance, economic0 Comments

OUTA goes to supreme court of appeal on Bill

OUTA seems to have forgotten Parliament….

The decision by the Opposition to Urban Tolling Alliance (OUTA) to spend many hundreds of thousands of rands of public money to obtain a judgement from the North Gauteng High Court to set aside e-tolling on the basis that legislation making e-tolling possible was not debated in the proper manner seemed at the time a little odd when OUTA did not  itself  make a submission to Parliament on the legislation or accept a  debate with portfolio committee on transport when invited to do so.

The fact that the decision by the Gauteng High Court has been reversed still excludes Parliament which seems to be yet another example of living with the belief that the world ends at the Jukskei River.

OUTA seems to be unaware of the fact the Transport Laws and Related Matters Amendment Bill is a national Bill which has been tabled; the matter is a national issue and that Parliament is the home of an independent parliamentary debating process surrounding the anchor legislation, whatever inputs may come from SANRAL, OUTA, the minister of transport or threats from COSATU.

According to the records produced at a meeting of the portfolio committee on transport to finally debate and approve the Bill, the committee spent nearly R200,000 on advertising the request to “Have Your Say” on the Bill, the normal insertions for a Bill known to be contentious.  The record also shows that most of this spend was on national dailies and the weekend press, as it so happens mostly printed in Gauteng.

The scurrilous suggestion by COSATU that no such advertising took place was a lie, possibly placed by COSATU to influence OUTA, and reflects the fact that COSATU  knows full well that Parliament was the home for such debate.

That’s why COSATU was there in full strength, one of two parties who bothered to appear in Parliament.   BUSA failed to appear in person, submitting comments in writing, which kind of submission becomes a very watered-down affair.

The fact that the South African Local Government Association (SALGA) did make a full submission (and a very good one) and succeeded with an effective amendment that whenever and wherever a toll is built a full debate must take place with the municipality or local authority, was accepted by Parliament. Which seems to prove a point.

Also the Bill was re-worded to the effect that alternative routes around the affected toll road are to be demarcated. Well done SALGA.

COSATU’s own suggestion to stop e-tolling on the basis of selection against the poor with no constructive suggestions as to how national roads were to be future-funded led to a rejection by members of the transport committee.

SALGA concluded in their submission that a lot more work needs to be done on advising the public how e-tolling  works; advertising on why it is necessary; pricing structures to be seen visually on approach; what any alternative routes are; what the discounts are about and how and when to buy an e-tag and if it is always necessary.

SANRAL, who were present at both the hearings and subsequent debates accepted privately this advice given by SALGA to the satisfaction of the portfolio chairperson and although SANRAL had no speaking role in the subsequent legislative debate, once again their presence was felt.

Even the parliamentary portfolio committee admitted in conclusion when the Bill was approved that nobody really wanted e-tolling but were clearly angered by the OUTA and COSATU suggestion that “nobody was informed on the Bill” and even more curious to know why OUTA itself was nowhere to be seen in Cape Town.

Presumably the Bill will go to the National Assembly now that Parliament is re-assembling and concurrence eventually sought from the National Council of Provinces. Presumably also OUTA is hoping that the Supreme Court of Appeal, where the matter is now headed, will instruct the minister to withdraw the Bill.

Posted in Cabinet,Presidential, Finance, economic, Justice, constitutional, Trade & Industry, Transport0 Comments

Parliament briefed on new climate response policy

climatechange2DEA outlines its climate response plans…..

Ms Judy Beaumont, deputy director-general for climate change in the department of environmental affairs (DEA), has told parliamentarians that the objectives of the national climate response policy were to manage inevitable climate change impacts through interventions that built resilience and emergency response capacity and to make a fair contribution to the global effort to stabilize green house gas (GHG) concentrations.

The department has made a number of presentations to parliamentary portfolio committees in recent weeks updating members on a six-month basis following the public hearings in June of this year resulting from the introduction of the White Paper on National Climate Change.

What can be done, says DEA

Ms Beaumont set out DEA’s current position, resulting in a National Climate Change Response Policy.  She said that her department has developed and detailed what the department calls “deliverables”.

She gave details of the plans to implement the programmes being run currently and the process being used to effect the general response policy which she described as “mitigation, adaptation and monitoring”. She also described DEA’s relationships with other government departments regarding their climate mitigation programmes and with national treasury regarding finance.

All in the same direction

Beaumont said that what had come out of the hearings was the need for a common set of climate scenarios and likely impact scenarios and it was necessary to build in a system of monitoring the situation as it developed so that all knew exactly on an ongoing basis what the picture was and how climate change was affecting the country, both economically and from a disaster aspect.

The major mitigation programmes to reduce carbon emissions needed to have a common set of desired outcomes so all knew what the target was, she said, and all the “flagship” climate change programmes being run in various parts of the country had to be in harmony with common criteria established under the response document, she noted.

Carbon budgets to follow

She said once the desired emission reduction outcomes (DEROs) had been defined then  carbon budgets were to be drawn up for relevant economic sectors.

Various departmental officials detailed some of the current issues under focus, one being a draft of South Africa’s monitoring and evaluation system framework by October 2013, followed by the report on the same subject to the UN Framework Convention on Climate Change by December 2014.

Some of the adaptation programmes on climate change were the dept. of agriculture’s land care plans; sectoral agro and agro industry programmes; an atlas on climate change and much research.  From the department of water affairs there was water conservation and demand management and from the South African weather service came a flow of forecasting, early warning and research, coupled with work through the national disaster management sector.

All headed towards agreed responses actions

She added that an important contributor with programmes linked to others was the department of cooperative governance where there was “mainstreaming of disaster risk reduction planning in progress with response toolkits”.  DEA had established, Ms Beaumont said, “that there should be a common set of climate scenarios, impact scenarios in key sectors and a need to assess costs and agree adaptation responses per sector.”

Into the entire process. DEA said, account had to be taken of the energy efficiency strategy being prepared by the department of energy, its integrated energy plan and the renewable energy independent power producer programme.

Scenario planning in three stages

On scenario planning, parliamentarians were told that the intention was to “project and evaluate the socio-economic and environmental implications of potential impacts of anticipated climate change and climate variability and the adaptation responses options available” for identified sectors in South Africa over the next decade and until 2025; in the medium for the next two to three decades until 2050 and with long term scenario visualisation to the end of the century.

The shorter term scenarios were already in progress and due for completion and funding had come from the German development organisation, GIZ, to conduct phase one of the long-term scenarios, where initial work had been undertaken.

Links with the national committee on climate change and all such scenario planning was in place, the committee was told.

Carbon Tax still  an imponderable

In answer to questions, DEA said that on carbon tax and a “carbon budget interface” an analysis of the different policy approaches and interfaces between the carbon budget and carbon tax instruments was currently underway. In funding much of the climate change response work in South Africa, parliamentarians were told, national treasury were leading the debate on this, if indeed there was to be a carbon tax, and were to finalise any carbon tax policy for national debate to counter the rise in GHGs.

A tax rate of R75 per tonne of CO2, rising to approximately R200 per tonne over time had been suggested “to save South Africa from potential catastrophic changes in its climate”  but as one parliamentarian told DEA, with global recession hitting business and industry to the extent it has, now and into the same scenario future, it has become doubtful who is the most threatened party.

Posted in Energy, Enviro,Water, Finance, economic, Fuel,oil,renewables, Health, Land,Agriculture, Mining, beneficiation, Public utilities, Trade & Industry0 Comments

Coastal environment bill proposals clearer

Focus still on sensitive areas….

Cabinet has now finally approved the National Environmental Management: Integrated Coastal Management Amendment Bill for submission to Parliament, the new draft  on coastal environment management now clearly seeking to clarify the protection of the sea and the sea-bed without limiting the functions of other organs of the state in performing their duties.

The bill also aims to support the sustainable management of the coastal environment as was proposed in the original drafts and the 1999 White Paper on the subject but the final Bill is yet to be seen based on what has been accepted by cabinet for tabling in Parliament.

The draft that never was

Originally in early 2012 a draft was published that had the broader objectives, namely  to clarify coastal public property and the ownership of structures erected on and in coastal public property and remove the power to exclude areas from coastal public property; simplify and amend powers relating to coastal leases and extend the powers of MECs to issue coastal protection notices and coastal access notices;

Other issues concerned dumping of waste and permits to do so and penalties and fines for matters related to environmental laws in general.

Transnet sorted out

In general debate and public hearings the unintended consequences became quite evident insofar that during 2012 Transnet and the department of environmental affairs reached an agreement both anchor legislation and any subsequent amendments did not have the unintended effect of the state appropriating all the port assets of the National Ports Authority below the high water market – including the breakwaters‚ entrance channels‚ turning basins and quay walls – estimated to have a value of R46bn.

Such an appropriation posed a material threat to Transnet’s business‚ port operations‚ loan agreements‚ capital investments and financial position. This presumably caused not only precedent but a change in thinking as to what exactly what was possible and what was not, insofar as an intended line for appropriation based on inland geo markers was concerned.

New definitions of “public coastal”

Whilst the newly and now tabled Bill broadly aims to support the sustainable management of the coastal environment, a definition of “public coastal property” provided in the new bill includes “land submerged by coastal waters (including the seashore of reclaimed land) on which the substrata is artificially created and located below the high water mark; any part of an immovable structure located below the high water mark and the seashore of any natural or reclaimed island.”

Areas that are excluded include reclaimed land above the high water mark and any immovable structure or part of such a structure (including harbours and harbour installations) above the high water mark, unless inside the admiralty reserve.

Penalties and fines are still included and so are matters regarding dumping.

Posted in Enviro,Water, Health, Land,Agriculture, Public utilities, Trade & Industry, Transport0 Comments

Major metros clarify picture on electricity tariffs

Metros confirm adherence to NERSA rules….

In an important meeting with the portfolio committee on trade and industry under the chairmanship of Bheki Radebe, South African Local Government Association (SALGA) gave its views on recent and forthcoming hikes on electricity tariffs and confirmed that  none of the major metros, constituting more than 80% of municipal electricity distribution, ever imposed tariffs that had not been approved by NERSA, the regulator.

Although it was acknowledged that there could be isolated cases of smaller municipalities not complying with this principle, Mthobeli Kolisa, executive director, municipal infrastructure services, SALGA, said there was an overlap between the provisions of the Electricity Regulation Act dealing specifically with tariffs charged by its licensees and the Municipal Finance Management Act dealing generally with municipal tariffs but any problems and most conflicts were overlooked in the national interest.

NERSA’s word was final, he said.

Local government reports for three major cities

SALGA, with input also from representatives of the eThekwini, Ekurhuleni and Johannesburg Metros, briefed the committee on the breakdown of municipal electricity tariff charges.  When determining the municipal increases, in line with the NERSA guidelines, the municipalities would take into account the costs of bulk purchases, repairs and maintenance, salaries, interest charges and other cost, and then would have to justify their requests for increases to NERSA, Kolisa said for SALGA.

eThekwini municipality said that electricity purchases made up the largest percentage of the budget of the metro.   For a municipality whose electricity purchases constituted 64% of its budget, Eskom would charge a percentage increase of 13.5%.    This would contribute 8.6% to the total average increase of 11%, which was a direct pass-through cost for the municipality.

They said that even if the municipal cost did not go up, the increase would still be 8.6% to the end customer, as a direct result of Eskom’s increase.   As a result of the municipal cost increases, a further 2.4% was added onto the total increase for the year, as a result of the increases in salaries and wages, repairs and maintenance amongst other cost items.

Sticking to the rules, they say

City of Ekurhuleni said that when Eskom was running short on generation capacity, which happened during the winter months of June, July and August, there was a strong signal during peak hours and although it might cause customers to complain, municipalities would not work against the national objective.

They said that an analysis of the Eskom “Megaflex” tariff indicated that energy was 90% of the cost in Ekurhuleni and demand constituted 10%, with the mark-up at zero (as Eskom was the baseline tariff for a municipality). The Tshwane tariff, on the other hand, indicated that energy was 62% of the cost, demand at 38% and mark-up at 9% which was known to be the case..Should Eskom run the lot?

Should Eskom run the lot?

Kolisa commented, in response to a question whether Eskom should distribute all electricity, that cutting municipalities out of the distribution lines and the equation generally would not be feasible.   It was still necessary for them to distribute electricity.

They only, and only they, had the infrastructure in place in their areas, he said, and the suggestion of separate re-distribution zones, or REDS, was an issue of the past.

However, municipalities and metros, said SALGA, faced a generalised critical shortage of skills in the engineering sector and were unable to attract and retain specialist skills, particularly since they also faced competition from private industries.    The idea of “adopt a municipality” inviting participation by industry was now being promoted to re-gain some of the lost territory.

City of Johannesburg explained that Eskom tariffs to municipalities included a 4,17 c/kWh (cents per kilowatt hour) cross subsidy towards Eskom’s residential customers, and a cross subsidy for electrification in Eskom supply areas (3,59 c/kWh) and said that the general idea of one rate or one tariff would not fit all municipalities mainly because of their disparate size, different services and different demographics.

Hope that independents might make common tariffs possible

City of Johannesburg said the government initiative to establish the ISMO system where Eskom and municipal distributors would be treated as peers and all distributors would be purchasing from the ISMO at wholesale rates would make some form of tariff alignment possible.   But this was well into the future.

SALGA said that a tariff design plan was in process by the five main metros which took into consideration the principles of the cost of supply and this co-operation accounted for the current compliance.    Metropolitan distributors and a significant portion of the larger municipal distributors, it was said, were working towards detailed cost-of-supply analysis.

In conclusion, SALGA noted that it might be possible to set a uniform tariff structure but such a move to make it viable would require financing.  Generally, part of the problem, it was said, was that there was a strong need to move towards more advanced technology.

Inevitable coal question

In reference to the control of cost inputs in energy supply, SALGA said it was interesting to note that China relied on coal that it imported at very low cost and countries like South Africa were exporting to China at cheap prices to get their business. Local government could not regulate on such issues as coal exports, which were an issue for debate at Eskom and national level, but SALGA could see perfectly well what some of the problems were.

SALGA finally noted that education campaigns to promote energy efficiency were not as effective in the field as they might be and SALGA would work with the Department of Energy to try to correct this.

Posted in Finance, economic, Land,Agriculture, Mining, beneficiation, Public utilities, Trade & Industry, Uncategorized0 Comments

PRASA gets its rail commuter plan started

Thousands of new coaches to be built for a start…..

Delivery of the first of new rail car rolling stock will start arriving in South Africa during the beginning of 2015 with a factory being built in South Africa to complete the balance of 3,600 new coaches, all being part of a R51bn passenger coach contract recently concluded  by the Passenger Rail Agency of South Africa (PRASA) with Gibela Rail Transportation.

CEO of PRASA, Lucky Montana, told the parliamentary committee on transport two weeks ago that the entire the current fleet would be replaced in the course of time and all trains, both commuter and long distance, would boast high level security, bigger seats, a new shape and better communication and technology.    A statement was issued in early December confirming that the tender had been won by Gibela.

Worldwide tender process instigated

Minister Sibusiso Ndebele instigated the tender system for new rolling stock in mid-April this year “inviting manufacturers from all over the world to participate in the procurement process” and during the launch indicated a target of 65% localisation target as part of the bid conditions for the new rolling stock.

He said then that “PRASA must ensure the manufacture of an estimated 7,224 Metrorail coaches nationally to meet the passenger demand over the next 20 years as well as the upgrading and the construction of new rail infrastructure such as depots facilities and signalling.”    Investment projects at key national high-passenger demand corridors in KwaZulu Natal, Western Cape and Gauteng were critical he said.

Hand in hand with necessary infrastructure

In addition, PRASA is currently implementing a series of such as the construction of a rail link for the Bridge City development north of Durban as well as the Greenview doubling project east of Tshwane “which will address the archaic single rail design and cater for the increased demands for a more efficient service in this area”.

Over 50 station upgrades, the building of new stations and developing “intermodal hubs” are underway in conjunction with local and provincial governments.  Montana said at the time,  “We have chosen strategic high-passenger corridors as our key upgrade corridors where the demand for our service is quite high with an average 30,000 to 60,000 passengers at peak hours”.

As far as the new contract is concerned, Montana said this week, “It was a mistake for South Africa to not invest in railway for the past 33 years. We are paying the price for that lack of investment.” About 90% of current passenger coach rolling stock was purchased in the 1950s, with the last purchase made in 1986, he said.

State of art travel

 “The new coaches will have air-conditioning  and will have CCTVs for security plus on-board communication”, he said, adding that automatic doors would be included on the short-haul coaches that the long distance trains would have WiFi installed, plus modern toilet facilities.

“We are not looking at increasing fares in the next five years on a massive scale; there will be adjustments to meet inflation, but we are saying that the current workers can’t bear the burden for the upgrade.”

À la Française

PRASA has now invested R123bn to the upgrade its portfolio over a period of 20 years and production of the trains are set to start in 2014. It was in November that PRASA announced that it had accepted a tender from French company Alstom for the programme, Gibela now being announced as the name of the consortium formed as a result.  Canadian, Spanish and Chinese companies also bid.

Posted in Electricity, Finance, economic, Labour, Public utilities, Trade & Industry, Transport0 Comments

Eskom MYPD electricity call is to sustain ratings

 Eskom stands by its MYPD3 asking price…….

Brian Dames, CEO, Eskom, on their Multi-Year Price Determination (MYPD 3) application to the National Energy Regulator of South Africa (NERSA), told parliamentarians of the trade and industry portfolio committee that price increases were necessary. He said that on one hand they had to have a respectable balance sheet to obtain development money whilst on the other hand, Eskom was coming from a background where investment activity had been inactive over the years.

“To keep the lights on”, Dames said, “there is now a cost.”

Electricity currently below cost

He said that because of historical reasons, electricity was currently charged at below cost-reflective levels and was not sustainable. Electricity prices needed now to have a “transition to cost-reflective levels to support a sustainable electricity industry that had resources to maintain operations and build new generating capacity, guaranteeing future security of supply.”

Dames said that Eskom had also recently issued an “interim integrated report” for the six months ended 30 September 2012 setting out a contextual review of the company’s overall performance from 1 April 2012 and in the light of this had presented the NERSA application.

He said that the current MYPD 2 was ending and consequently Eskom had to submit such an application to NERSA to determine the country’s electricity price adjustment for 2013/14.

However, this time Eskom was proposing a five-year determination for MYPD 3, running from 1 April 2013 to 31 March 2018, which would ensure a more gradual and predictable price path for households, businesses, investors and the country as a whole.

Eskom’s five-year revenue request translated into average electricity price increases of 13% a year for Eskom’s own needs, plus 3% to support the introduction of Independent Power Producers (IPPs), giving a total of 16%, representing a total price increase from the current 61 cents per kilowatt-hour (c/kWh) in 2012/13 to 128c/kW h in 2017/18.

Balance sought between needs of Eskom and poor

The impact of the price increase on the economy had been considered in addition to guidance from the President’s State of the Nation Address in which he requested Eskom to consider a price path which would ensure that Eskom and the industry remained financially viable and sustainable, but which remained affordable especially for the poor. Dames said he believed that Eskom’s application achieved an appropriate balance.

In addressing the impact of price increases, Dames said that Eskom believed that poor households should be protected from the impact of electricity price increases through targeted, transparent cross-subsidisation in accordance with a national cross-subsidy framework.

A failure to achieve cost-reflective prices would sooner rather than later impact on South Africa’s economy and its growth prospects, he said.

MPs query what electricity giant has as objective

A number of opposition MPs disagreed and queried the entire cost-reflective process used by Eskom, saying that the tariffs proposed by Eskom rather posed a dangerous threat to economic growth and the future of business in South Africa, as well as job creation.

Whilst Eskom wanted a 4% targeted return in the medium term and 8% in the final year, they said, JSE majors had returned on average 6.6% per year in the last ten years. They asked if Eskom was attempting to build a balance sheet that compared with global corporates just in order to get loans.

The main thrust of certain opposition MPs queries was the sacrifice in growth rate, damage to business development, to job creation. ANC MPs complained of the effect on the poor.

Paul O’Flaherty, finance director at Eskom, said that the only sources of funding available to Eskom were debt; equity injected from Government and operating profit from its revenue. Eskom had requested for an additional equity injection from the state but that was not forthcoming leaving generation of debt to them and raising enough operating profits from its revenue.

He said in terms of depreciation factors on the figures shown, such was regulated by Nersa and that there was no way of getting around the fact that Eskom had to pay its way. According to the cash flow predictions, a trillion rand of revenue would be needed to pay for primary energy costs, employee costs and demand side management, repairs and maintenance.

Eskom must be seen as viable entity for capital programmes

Eskom’s capital program over the next five years included finishing the Kusile power station repayments, plus a further R360bn in debts, which meant that R200bn had to be raised from the market. This had to be done against a successful balance sheet. Eskom got investment status because of Government uplifting, he said. It had to show its cash metrics were moving towards a more sustainable company, he said.

Dames added that Eskom required on its equity a higher return than the sovereign because of the risk involved and in terms of the cost of debt in a normal environment and that the cost of Eskom borrowing was more expensive that the sovereign borrowing. The cost of debt had been arrived at by Eskom working with NERSA as well by as KPMG and the costs included in the MYPD 3 application were appropriate, in his opinion.

Mohamed Adam the legal representative at Eskom said on questions relating to the impact of price increases on the manufacturing sector, that the impact of price increase on the economy had been considered in addition to ensuring that both Eskom and the industry remained financially viable and sustainable, but which remained affordable especially for the poor. There was a threshold at which Eskom would also face which amounted to a tipping point if prices were too low.

Unbundling of Eskom not an option

In conclusion, Mr Dames said that the submission of the MYPD 3 application was the beginning of a public process and he rejected MPs suggestions that Eskom was a monopoly that should be broken up.    He said that any unbundling of Eskom accompanied by the introduction of private participants would fail to bring in lower prices since higher returns would be needed by private generators and distributors.

As to whether Eskom would be willing to supply certain municipal customers,  Dames said that local authorities had a constitutional right to supply the customer within their jurisdiction and  Eskom was unable to supply a number of municipal customers anyway based on their relation to the network. Also municipalities would lose revenue.

Dames said that the growth rates in the MYPD 3 submissions were lower than those required in the New Growth Path and the National Development Plan and whilst the energy reserve margin might be held in the immediate future, it would disappear if new generation capacity was not brought on line after the completion of Kusile and if there was growth. The current build programme did not address all the capacity needs of South Africa into the future.

EIUG figures do not reflect current picture

Dames, in addressing the claim by Energy Intensive Users Group (EIUG) that Eskom’s costs of maintenance were higher than they should be, said a considerable quantity of EUIG’s comments were based on inaccurate figures.

Much in the way of numbers quoted by EIUG were based upon “aspirational targets achieved during the 1990s when Eskom’s power stations were a lot younger”, it was said. The constrained power system now existing did not now allow for such philosophical assumptions. There was a balance which Eskom now needed to strike in practical realities as far as keeping the lights on was concerned.

Posted in Electricity, Energy, Finance, economic, Land,Agriculture, Public utilities, Trade & Industry0 Comments

This website is Archival

If you want your publications as they come from Parliament please contact ParlyReportSA directly. All information on this site is posted two weeks after client alert reports sent out.

Upcoming Articles

  1. Carbon Tax debate heats up in Parliament
  2. Copyright Bill goes into final stages
  3. Hate Crimes Bill on way back to Parliament
  4. DTI briefs Parliament on the road ahead
  5. RE-IPP4 alive again with LNG interest
  6. Fresh start to Minimum Wage Bill
  7. Competition Commission rough on investors

Earlier Editorials

Earlier Stories

  • AARTO licence demerit system studied  …. In what has been a legislative marathon, the update of the Administrative Adjudication of Road Traffic Offences Act (AARTO) has now reached a stage […]

  • SARS role at border posts being clarified …. In adopting the Border Management Authority (BMA) Bill, Parliament’s Portfolio Committee on Home Affairs agreed with a wording that at all future one-stop border […]

  • Modernising SAPO a culture change ….. sent to clients 27 February…. Stage by stage, Mark Barnes, Group Chief Executive Officer of South African Post Office (SAPO), appears to be reforming cultures and […]

  • OECD money task force waiting for SA   ….sent to clients Feb 7…. Chairperson of the Standing Committee on Finance, Yunus Carrim, made it quite clear in terms of parliamentary rules that […]

  • President Zuma vs Parliament on FICA Bill …..editorial……The convoluted thinking that is taking place in South Africa to avoid the consequences of the law has once again become evident in […]