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DA: Statement by Sejamothopo Motau, Democratic Alliance Shadow Minister of Energy, on Eskom tariff hike (13/10/2009)

13th October 2009

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The decision by Eskom to apply for a 45% electricity tariff hike for each of the next three years is a gross insult to vulnerable South Africans. The South African public is now carrying the cost of the ANC government's mismanagement. Eskom, a key utility, central to the lives of all South Africans, has been systematically reduced to an institution that operates on the red line, every day. That is not the public's fault. It invested its faith in various ANC administrations, to look after its interests. That good faith has not been repaid. Indeed, it has been abused. And, despite not a single person being fired, suspended or rebuked for Eskom's mismanagement - if anything they have been rewarded with pay increases - we are all now being to fit the bill for a collective failure we are not responsible for. That is not only an insult, it is further abuse the public's good faith. Because the message it is sending, when all the rhetoric is removed, is that not only will this government never act against those that are guilty of maladministration and bad judgment, they will be rewarded and when that same government has to compensate for its own inadequacies, it will turn to the public to bale it out. It is disgraceful. How can Eskom justify CEO Jacob Maroga's 26.7% salary increase, even while the power utility failed dismally in its mandate to provide cheap and sustainable energy to ordinary South Africans? The list of problems at the utility is now seemingly endless, and each of these problems illustrate the fact that gross mismanagement is the real cause of Eskom's problems. There simply is not evidence to support Eskom's claims that higher input costs are the chief cause of these tariff rises - indeed, the price of coal has fallen by 59.2% in August from a year ago (to US$64 per megaton from US$156.9). According to a study by the International Energy Agency, the international average price of coal power is about 26c per kilowatt-hour - but the reality is that many South Africans are already charged at more than double the international norm at 65c per kilowatt-hour; and this is before the tariff increase. Debacles such as the mismanagement of coal supplies, the failure to apply the most basic considerations when procuring large capital, terrible mismanagement ahead of the load shedding period, and the failure to plan for the Medupi power station water requirements (which will result in a major environmental disaster if nothing is done) demonstrate exactly what is wrong at the utility, and why consumers now face the prospect of such high costs. The Democratic Alliance (DA) will interrogate Eskom's application, and submit further parliamentary questions where necessary. In the mean time, it is grossly unfair to force South Africans to pay up for the failures of Eskom.

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