Eskom wants to “drastically increase” electricity prices

Zoomzoom

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Out of 12 billions of exports (in 2017), it’s much better than their South African recovery rate (and I’m sure they still profit from it even with the debt scraped off).

ok but that isn't the point. Between international debt and local debt (both of which I referenced) ESKOM's plan seems to be charge the few who do pay more, to cover the debt of those don't pay, both at home and abroad. Dunno about you, but I'm a bit gatvol with being regarded as a cash cow by all and sundry in SA.

Between ESKOM, the national government's increases and municipal increases, one is left feeling like a stone being squeezed dry.
 

j4ck455

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The Rapport Newspaper reported that Mabuza said unless they receive a much higher increase, they can easily burn through a R100-billion bailout in four years.

It added that Eskom wants to double its profits from electricity sales to pay off its mounting debt, which is [highlight]only possible through a big increase in pricing[/highlight].

Rubbish, in a liquidity crisis a company's survival strategy should be multifaceted, instead of Eskom's retarded thinking that the public always has to foot the bill for Eskom's corruption and gross mismanagement.

One option is drastically reducing Eskom's salary bill (retrenchments), and we all know that there is no political will to make that happen before the elections in 2019, nonetheless it is one of several necessary and unpopular actions that needs to be taken urgently.
 

Fuzzbox

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Stop spending money on consultants.
TRIM your extremely BLOATED workforce.
That would go a long way to solving the problem.
Saw an article saying that for the output that ESCUM provides they only need 14000 employees.
I think ESCUM forkforce stands at about 42000 employees.
 

f2wohf

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Stop spending money on consultants.
TRIM your extremely BLOATED workforce.
That would go a long way to solving the problem.
Saw an article saying that for the output that ESCUM provides they only need 14000 employees.
I think ESCUM forkforce stands at about 42000 employees.

The issue is that shedding even 10000 employees (severance packages & co) would probably cost 10 billion (with their annual package it’s actually lowball) and bankrupt Eskom in addition of being particularly unpopular.

Not replacing employees retiring or departing is probably the best choice but would take decades to reach the right workforce.

What also needs to be considered is the productivity of their workforce, are they able to function without consultants? I highly doubt so, I know several executives at Eskom and they’re far from bright sparks.

I think that the only logical way is to unbundle generation and distribution (making one large distribution company who takes over from municipalities too would be a good idea) and open the generation market to competitors.
 

richjdavies

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The issue is that shedding even 10000 employees (severance packages & co) would probably cost 10 billion (with their annual package it’s actually lowball) and bankrupt Eskom in addition of being particularly unpopular.
The elephant in the room is the Eskom House Bond book - 16,000 Home-bonds for employees at R8.7bn. Make half of them redundant and you'll lose a lot of that money. (It's about R500k per 'customer'... ! crazy no!)
https://www.moneyweb.co.za/news/sou...kes-first-step-in-eskom-finance-company-sale/




I think that the only logical way is to unbundle generation and distribution (making one large distribution company who takes over from municipalities too would be a good idea) and open the generation market to competitors.
100% with you there!
No more issues with IPP's not being signed up,they just provide to the grid. You would need group buyers as well. It's not good having everyone generating, and everyone consuming with no-one doing the matching. People freak out with Time of Use Tariffs... dynamic pricing they would go crazy!
 

j4ck455

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The issue is that shedding even 10000 employees (severance packages & co) would probably cost 10 billion (with their annual package it’s actually lowball) and bankrupt Eskom in addition of being particularly unpopular.

Not replacing employees retiring or departing is probably the best choice but would take decades to reach the right workforce.

ESKOM does not have to retrench 10000+ employees in one go, it can be done in phases (starting with a voluntary phase) which would reduce the cashflow risk compared to paying out 10000+ retrenchment packages all at once.

Retrenchments are usually applied on that last-in first-out (LIFO) basis, which means that the amount of money paid in packages to employees who have only been there a short time, is much less compared to packages paid to long serving employees.

Not hiring people to replace retiring employees and others that move on, will not be enough in the short term to have any meaningful dent on ESKOM's monthly salary bill. The only option is to retrench in stages.

When a company starts the 189 process, I believe the law says that the company is not allow to employ new people for a certain period after retrenchments have been concluded.

It is also fairly common for former employees who have been retrenched (or who have retired), to reappear as contractors when it is clear that their skills and experience are still required, but they cannot be hired again as permanent employees due to a 189 embargo on hiring. I don't know how legal it is, but it does happen.

What also needs to be considered is the productivity of their workforce, are they able to function without consultants? I highly doubt so, [highlight]I know several executives at Eskom[/highlight] and they’re far from bright sparks.

What misfortune has befallen you, that you have come to know several of ESKOM's executives?

Any company that tries to completely eradicate contractors / consultants will be painting itself into a corner, and once the deed is done those people will have moved on to find alternate sources of income with little desire to return when it becomes clear that their skills are still needed.

I think that the only logical way is to unbundle generation and distribution (making one large distribution company who takes over from municipalities too would be a good idea) and open the generation market to competitors.

What you propose will take a very long time to be implemented, whereas the problems with ESKOM require immediate solutions.

It's also no secret that numerous municipalities have been neglecting to maintain their electricity distribution networks, a provincial or national electricity distribution company (state owned or privatised) would spend all of its budget just trying to replace that aged infrastructure and it would take decades to become a viable business. The problem of copper cable theft also factors in here.
 

Zoomzoom

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Do you know that part of the reason why our electricity infrastructure isn't uptodate? Because the government put a hold on ESKOM building new stations etc back in '94 or so in their first rush of enthusiasm to get foreign investors into SA, and just like Telkom no-one wanted to touch SA with a bargepole because of the problems with distances, the amount of infrastructure that would have to be modernised without seeing much return and the vast masses of poor which have to be supplied with electricity with little or no return. So we have TELKOM and ESKOM and the mess we have today with both.
 

maumau

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It won't end well for the country.

Its already cheaper to generate electricity from Solar.
If they increase will be cheaper to generate electricity from Solar, store with Batteries, and go offgrid.

- Rich are already offgrid for the most part.
- Poor don't pay.

So the middle class is the only sector paying for electricity. When it becomes obvious that going offgrid is cheaper, this will leave Eskom with less *paying* customers, and no way to recoup asset costs / labour etc.

Death spiral incoming.

Also going to be an issue for the government in terms of income from Petrol in a decade or so, as more and more people will be moving to battery powered cars.


What needs to happen, is that the poor need to pay for electricity. No more Soweto owing tens of billions that gets written off every few years.

The middle class is gatvol of subsidising ungrateful c*nts that destroy infrastructure, steal, then scapegoat the middle class for having the money to subsidise the poor's bullsh*t.

Those that can, will leave (20% of the white population has), and those that can't will be fed-up of subsidising an ungrateful populace.
End result will be the proverbial African Sh*thole that Trump talked about.

Who cares about the middle class. Fsk them.

/s
 

Temujin

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It added that Eskom wants to double its profits from electricity sales to pay off its mounting debt, which is only possible through a big increase in pricing

**** these clowns are dumb... it doesn't work that way, we're already 400-500% or so higher than we were a decade ago, and what has happened? You want to double your profits, cut the price by 50%, create a 'cheap electricity' environment for manufacturing etc, which intern pumps up the economy, creates jobs and gets investors flocking in, only then will you 'profit'... constantly increasing prices is not the way you do it, you're guaranteed to close your doors


Wouldn't it be wonderful if the court rules they've been ripping off the poor for years and they must cut their prices:D oh how wonderful it will be
 
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Lupus

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Eskom wants to “drastically increase” electricity prices

Eskom chairman Jabu Mabuza said the only sustainable solution to Eskom’s financial woes is to drastically increase electricity prices.

Mabusa said on Thursday that Eskom will take the National Energy Regulator of South Africa (Nersa) to court to have its tariff determination for 2018/19 set aside.

Has anyone explained to them how things work? They told us in 2008 to drastically cut our usage due to load shedding, so we did and they increased the prices since over 700% because the load isn't as high as it used to be, the more you increase your prices the more people are going to find ways to not use you.
This seems to be common South African logic, we aren't getting enough money, I know lets increase prices, more people drop off, increase prices again, instead of maybe having 500 people paying R500, they want 100 people paying R2500
 

Thor

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Now if only Elon can get his house in order and make me my damn Tesla I ordered.

That + Powerwall and Solar.

Petrol out, Eskom out, hell in an eat all the sushi then.
 

VooDooC

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Screw this, already looking into going off the grid. Going to cost a bit, but in the long term it will work out cheaper and as a bonus, screw over Eskom.

They do not seem to realise that the more they piss off the paying customers by constantly increasing the price and constant power failures in multiple areas due to incompetence and cable theft, the more people will start to move away and look for alternatives. In the end they will be stuck with the non-paying clients. That's probably when they'll start taxing you on your private power generation.
 

ArtyLoop

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Screw this, already looking into going off the grid. Going to cost a bit, but in the long term it will work out cheaper and as a bonus, screw over Eskom.

They do not seem to realise that the more they piss off the paying customers by constantly increasing the price and constant power failures in multiple areas due to incompetence and cable theft, the more people will start to move away and look for alternatives. In the end they will be stuck with the non-paying clients. That's probably when they'll start taxing you on your private power generation.

Well to be fair we know that complete idiots are now running that circus
 

f2wohf

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ESKOM does not have to retrench 10000+ employees in one go, it can be done in phases (starting with a voluntary phase) which would reduce the cashflow risk compared to paying out 10000+ retrenchment packages all at once.

Retrenchments are usually applied on that last-in first-out (LIFO) basis, which means that the amount of money paid in packages to employees who have only been there a short time, is much less compared to packages paid to long serving employees.

This is why I took 1 million per employee in average, the average cost being per employee being R708k, it doesn’t seem excessive since much of the retrenchments are in the middle management layer (that’s where the fat is at Eskom, at each meeting I have 12 managers).

Even retrenching them 2000 by 2000 annually would have a very small impact, would take very long and would still warrant a bailout.
https://www.esi-africa.com/eskom-retrenchments-not-an-option-to-reduce-operational-expenditure/

It is also fairly common for former
employees who have been retrenched (or who have retired), to reappear as contractors when it is clear that their skills and experience are still required, but they cannot be hired again as permanent employees due to a 189 embargo on hiring. I don't know how legal it is, but it does happen.

That’s already the case, all my substation and line designers are ex Eskom who are now consulting engineers working at 80%+ for Eskom at prohibitive tariffs.

What misfortune has befallen you, that you have come to know several of ESKOM's executives?

I work in an energy company. I meet Eskom at least once a week.

What you propose will take a very long time to be implemented, whereas the problems with ESKOM require immediate solutions.

Such as?

It's also no secret that numerous municipalities have been neglecting to maintain their electricity distribution networks, a provincial or national electricity distribution company (state owned or privatised) would spend all of its budget just trying to replace that aged infrastructure and it would take decades to become a viable business. The problem of copper cable theft also factors in here.

That what’s happened in Europe and it worked very well, the infrastructure company (whether it’s the one owning the pipelines, the rails, the transmission lines) took almost all the debt and were virtually bankrupt companies for decades while clearing the Eskom. The same could happen with the distribution company here.
 
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