6 reasons Eskom should cancel its MYPD 60% tariff increase application

As Nersa prepares for public hearings on Eskom’s 45% Multi-Year tariff increase request (on top of an already approved 12% increase), Energy Expert Ted Blom has called on Eskom to scrap its application as the still captured and corrupt utility should not be granted any increases until a full forensic audit has been completed.

As we now enter 2019, Eskom is rudderless,” says Blom. “The Eskom board has proved to be dysfunctional and required Ministerial intervention on several occasions. Although appointed 12 months ago, they have been unable to carve out a credible turnaround plan, despite the use of expensive outside consultants.” Blom further pointed out the skills shortage which has lead to the President intervening by appointing “8 wise men” to steer the Board in the right direction by a deadline set for 31 January 2019.

“The many futile interventions point to an unsalvageable and bankrupt Eskom,” says Blom, “In fact, the pillaging is still continuing, this time by another ‘third force’ which has replaced the Zupta gang.”

The extent of the pillaging has already been confirmed by the Public Protector, the Parliamentary Investigation report, the Dentons report, and in Eskom’s annual report where it references corruption over 30 times. Questions remain as to why no-one has been prosecuted and no monetary recovery has occurred.

Throwing coal on the fire is an acknowledgement of serious design flaws at Medupi and Kusile, resulting in an estimated 10% or more performance incapacity – according to Minister Gordhan’s latest revelations. Yet Eskom kept this quiet since the first commission began in 2012.


Where are the auditors and Eskom Governance structures in all this mess?

In addition, Eskom has also acknowledged coal procurements lapses of late. According to Blom, rampant coal procurement fraud has been ongoing since 2006, and Eskom has ignored or blessed this ongoing fraud annually.

Although Eskom has acknowledged a bloated headcount (estimates are by 35 000 including ghost workers), Nersa continues to ignore the gross inefficiencies and has, since 2008, granted tariff increases of some 500% above the corresponding inflation rate. “This has just fueled and financed the rampant corruption,” claims Blom.

Still to be uncovered is the actual loss been forced onto Eskom as a result of Government’s corrupt renewable schemes. “Last year, it sucked around R34bn from Eskom revenue and is destined to increase to R50bn for this year “ states Blom. Another 14 GW of REIPP is in the pipeline on top of the currently approved 6GW – Blom suggests this will “kill off” Eskom within months as lenders can see the writing on the wall.

Blom intends representing electricity users at each of the 10 provincial public hearing venues from 14 January to 4 February 2019. “Against these dire circumstances, it is NOT appropriate for Eskom to proceed with their ‘business as usual’ tariff increase applications,” Blom stated…Read More