Eskom tells business not to rely on state
ESKOM CE Jacob Maroga has urged business not to rely on the government to find solutions to power shortages likely to persist until 2013, when the utility will have significantly expanded its generation capacity.
“I think we need to be circumspect about our expectations of what government can do,” he said yesterday during a presentation on the electricity shortage to Business Unity SA (Busa).
“The government has intended to do a lot of things, but the politics of government is that it takes time. We need to take things forward ourselves.”
Maroga has said as CE, he will be accountable for a power shortage which has led to chronic outages and may threaten faster economic growth — even though he only took the post last May.
Earlier this week government spokesman Themba Maseko said the cabinet knew in 1998 that investment was needed in power infrastructure, but had pinned its hopes on investment from independent power producers.
Industry sources say that as electricity prices were kept low by SA’s national regulator, the private investment failed to materialise, putting SA in a similar situation to China, which is facing its most severe power shortage in history.
Maroga said the cost of the utility’s five-year expansion programme had risen to more than R200bn, from an initial estimate of R150bn — Eskom’s first public acknowledgment of an increase.
Figures in his presentation to Busa put the price tag at R244,5bn — compared with capital expenditure of R37,5bn since 2004.
Vendor financing by large suppliers is one funding option for the expansion, the presentation showed. Standard & Poor’s has said it will downgrade Eskom’s ratings if it borrows too heavily. The presentation predicts
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Eskom’s slim reserve margins, or surplus capacity, will widen over the next three years, based on forecast demand.
Eskom proposed short-term solutions to business and industry leaders this week. They include reducing demand for power 10%-20% through rationing and voluntary cutbacks and fostering “co-generation” of electricity from industries.
The utility has said industrial projects already in the pipeline would go ahead, but urged the government not to take on new energy-intensive projects without a careful impact analysis.
“How to do it is difficult and I don’t have an easy solution,” Maroga said. Eskom intended to buy power from “customers” to build football stadiums ahead of the 2010 World Cup, he said, but did not identify them.
“On Fifa stadium issues we are looking at buying power from customers in that time. Some customers are talking about investment in that in the next few months — I expect a robust plan to minimise risks,” he said.
Top company executives have welcomed Eskom’s transparency and direct approach, and agreed to take part in a task team to resolve the problems.
Busa members yesterday asked Eskom to improve the “certainty and predictability” of load-shedding, or shutdowns.
Busa said all stakeholders should play their part to prevent “economic paralysis”.
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