Democratic Alliance press statement by Natasha Michael MP DA Shadow Minister of Public Enterprises Eskom Recapitilisation – more money into a black hole The DA will approach Minister of Public Enterprises, Lynn Brown, requesting an urgent meeting to discuss alternative strategies for reform at Eskom and the restructuring of the energy sector. Three government Ministers, Minister Brown amongst them, have been tasked with producing a recapitalisation plan for Eskom. The proposed recapitilisation is flaunted as a move towards addressing South Africa’s energy problems. Government’s plan appropriately diagnoses the problem but identifies the wrong solution. Reforms need to be directed at transforming the electricity sector rather than spending more money on yet another fruitless state enterprise. The first step in this is through the passing of the Independent Services an Market Operators (ISMO) Bill which my colleague the DA Shadow Minister of Energy, Lance Greyling, will continue to champion in Parliament. With Eskom already operating off a squandered government guarantee of R350 billion, a further government guarantee or cash injection will amount to little more than further wasteful expenditure. Various instances of poor management at the state utility are a clear symptom of a culture of poor financial management and disregard for South Africans – Eskoms primary consumers. These include – • The poorly managed construction of the Medupi power project which has been delayed for 3 years, initially costing R90 million and is now estimated to costs approximately R150 milllion; • The awarding of approximately R 31 million in “performance bonuses” to Eskom executives in 2012 despite the utility’s failure to deliver cheap and stable power to South Africans; • Earlier this year, a proposed R500 million cosmetic upgrade at the state utility’s headquarters while simultaneously seeking R50 billion from government to ease Eskom’s cash-flow problems. The DA believes real gains in South Africa’s energy crisis can be addressed through instituting the following reforms – • Ending Eskom’s monopoly through partial privatization of the utility; • Introducing reform through the ISMO Bill by – 1. Creating a Transmission Service Operator who owns the grid and is entrusted with energy modelling and procurement of energy from both Eskom and IPP’s; and 2. Allowing for wheeling through the grid so as to allow companies to procure electricity directly from Independent Power Producers –fostering a competitive environment that promotes efficiency and cost reduction; Further, DA will continue to resist any attempts from Eskom to increase electricity tariffs through the National Energy Regulator of South – thereby passing the cost of its inefficiency to financially pressure South Africans. The DA will not rest until South Africans have cheaper an stable power.
Posted on: Wed, 25 Jun 2014 06:50:29 +0000
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