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Eskom’s future debated at Africa Utility Week 2019

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By Ebrahim Kangwa Chibwe

There was a robust discussion on how to tackle South Africa’s energy crisis at Africa Utility Week 2019 held at the Cape Town International Convention Centre (CTICC). The annual event draws a range of energy and technology experts to what is dubbed as Africa’s premier energy showpiece.

South Africa’s energy minister Jeff Radebe was the keynote speaker. In his opening remarks, Radebe deplored the continents’ lack of expertise in energy and technologic fields. The minister also noted Eskom’s inability to sustain its grid for the more than 50 million consumers. He, however says the country is not ready to abandon coal energy. Eskom is currently facing debt challenges and the government has allocated R23 billion to the entity which experts say is inadequate.

Energy experts Ted Blom and Dr Grove Steyn, both serving on the presidential task team on Eskom, told the conference that Eskom’s governance has collapsed.

“We don’t know who is running Eskom because it certainly does not look like it is the board. All it can be is a third force” he said.

“We simply do not know who is held responsible because it is not maintained properly and not run properly. So, in terms of Eskom of the future – it’s already dead in the morgue. All we are throwing money at is for more people to be corrupt.”

Blom also called Eskom’s debt burden a “fallacy”.

“They want you (taxpayers) to pay this debt but 75% of that debt is not due and that is why I have called for a forensic investigation.”

Blom said corruption and mismanagement is well entrenched in Eskom. According to him South Africans are made to believe the money (debt) is due to Eskom but more than three-quarter of this monies are due to corruption and mismanagement. He noted the Medupi Power plant as example. In 2008 the quote for building Medupi was R33billion, he said.

“A year ago, I went back to Eskom to verify that amount and today Medupi is running at R170 billion for a half-finished project. If that is not corruption and mismanagement, then I don’t know what is and I don’t understand why we have to pay for that.”

But for Steyn the debt trap is very real.

“Eskom is indeed in a debt trap. It is now being bailed out by government almost on a monthly basis and even the R23 billion allocated in the budget is not going to be enough to fill the gap and get Eskom out of the debt trap. So, it is quite serious, and it means we will have to start thinking outside the box and find a range of solutions to help ensure – given Eskom’s systemic role in the economy – we do not end up in a situation where we have a full on default on debt.”

Dr Steyn told the gathering that the world traditional large scale utilities have been successful in changing their business models and becoming players in the renewable energy space.

On the issue of Integrated Resource Plan (IPP), Minister Radebe told delegates South Africa’s long-awaited IPP plan is supposed to give the necessary clarity on the direction of the country’s energy future. The minister said the issue, which is under Nedlac, will be finalised soon. Other issues discussed include concerns over decreased expenditure on water security research amidst serious drought problems across Southern Africa.

Research fellow at Nelson Mandela University Dr Hlamulo Makelane told delegates that South Africa is a water scarce country, yet expenditure on research and development for water security does not reflect this picture. Makelane said funding for water research has declined by 45 percent in the last five years. Some of the most important topics include cyber-security, renewable energy, agriculture and technological innovations.

About 3000 delegates were in attendance.

VOC


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