Perspective... Eskom (when it was the Electricity Supply Commission) was one of the best companies in the world. It was owned by all South Africans, and was a non-profit making organisation. Money was always set aside, by selling electricity for more than it cost to produce, for replacement and expansion. THEN (1) it was turned into a business with the government as sole shareholder. This was done to collect further tax from those who actually pay for electricity, and to provide a vehicle for the implementation of government policies. Profits, and the money set aside for replacement and expansion was paid to the government as dividends. Then (2) the sole shareholder directly appointed most of the executive, and non-executive directors - called appointments ! Then (3), people started getting appointed & promoted based on potential. They couldnt actually perform the work, so the people who could, stayed around as contractors. Although no additional work was getting done, the workforce increased by 23%, but this was also fine because the government wanted to reduce unemployment. Then (4), in an attempt to reduce unemployment, by boosting exports (by making them cheaper) Eskom was instructed to produce the cheapest electricity in the world. This didnt work - instead of expanding and creating jobs, business just made bigger profits. All investment was stopped due to this. Then (5) the sole shareholder in the Mbeki era, wouldnt allow Eskom to build any further power stations, saying that this would be done by private investors. The private investors didnt come to the party because electricity was too cheap to provide adequate return on investment. 5 years too late Eskom was allowed to expand and build 2 huge, new power stations, but it didnt have any money - this had to be borrowed. Then (6) the ANC (in control of the sole shareholder) wanted a piece of the cake and got a big piece of Hitachi - the company who won the contract to supply the boilers for these power stations. Because of this Eskom wasnt allowed to take Hitachi to court when inferior product/service was supplied. Then Eskom, with its reduced standards, attempted to project manage the construction of these new power stations by itself. What a calamity ! The money was borrowed from the world bank, however because they are coal stations a requirement was the installation of flue gas desulpherisation. This hasnt happened (yet) because of insufficient water. So Eskom is in serious trouble with the world bank. So, because of taxation, affirmative action, transformation, employment equity, BBBEE, lots and lots of corruption, a bloated and bureaucratic workforce, etc. Eskom has run out of money and generation capacity, standards have dropped dramatically, corporate memory is being lost at an alarming rate .............................. Today Eskom is attempting to borrow the money for the steam generator replacement at Koeberg from a French bank. One of the questions that this bank is asking is about post Fukushima safety improvement progress. Guess what ! Because there is no money .......... As is always the case, SOMEONE must pay. So Eskom wanted to dramatically increase its price. The government(who is also the sole shareholder) wouldnt allow an increase large enough to cover the cost of its mismanagement. So Eskom is bankrupt, and its shares and bonds have been becoming junk status. What a circus.....
Posted on: Thu, 15 Jan 2015 08:12:14 +0000