Energy news – budget vote season at Parliament

The past four weeks have seen Parliament debating the budget votes of the national departments – an annual ritual and a busy time of year for the National Assembly – and Friday was the turn of Minerals and Energy .

Unsurprisingly, DA minerals and energy spokesperson Hendrik Schmidt put the energy crisis front-and-centre in his speech in the debate, saying that the department had been affected by some of the worst crises since 1994.

“It was Cabinet who took the decision not to allow Eskom to expand its generation capacity in order to lure private investment,” said Schmidt. “It was Eskom who warned government that South Africa would run out of power in 2007/8 followed by a failure by Cabinet to heed this advice. It was government who failed to restructure the electricity regulatory environment to attract private business – which was expected to invest billions of rand over a return of a period of 30-40 years. It is shortsightedness, lack of political leadership and vision as well as a failure by this government to give practical effect to the reality of the decision to attract private investment that has lead to the current crisis.”

He reiterated the DA’s call for an independent inquiry into Eskom’s management, and for the restructuring of the electricity sector to encourage private sector investment – a view echoed by a top business group this week.

Eskom was also a key focus of DA spokesperson on public enterprises Manie van Dyk’s speech in that department’s budget vote debate in May.

Eskom News: Are foreign customers receiving preferential treatment?

Not only have electricity exports to neighbouring countries increased in the year to March 2008 – while South Africans have been forced to contend with crippling rolling blackouts, power rationing and load shedding – but Eskom has also provided less electricity to South Africans over the same period. This is according to a statement by DA spokesman on public enterprises Manie van Dyk last week.

He said the Democratic Alliance (DA) had submitted parliamentary questions to Public Enterprises Minister Alec Erwin to determine whether neighbouring countries were in fact receiving preferential treatment at the expense of South Africans.

“Specifically, electricity exports increased in the three months to March 2008 and in March itself by 6 percent and 1 percent respectively, while the distribution of electricity to the nine provinces by Eskom contracted by 1.7 percent and 4.5 percent, respectively,” said Van Dyk.

“This casts serious doubts on Minister Erwin’s assertions that Eskom’s foreign and domestic customers receive ‘the same treatment’.”

Parliamentary question on Eskom Bonuses

A couple of weeks ago, we highlighted the issue of Eskom senior staff being paid huge bonuses despite the energy crisis the country was facing. The DA submitted a parliamentary question about the performance contracts, and the question and answer are appended below.

Unfortunately, the minister has taken a very narrow interpretation of the question and hidden behind the confidentiality of performance contracts. He refuses to give any information at all about the kinds of things that are considered in evaluating performance (appropriate long-term planning and ensuring a reliable and suitable quality coal supply would be two key performance areas, one would think).

Mr C M Lowe (DA) to ask the Minister for Public Enterprises:

(1) With regard to Eskom’s past three annual reports in which it was revealed that its top management was paid a total of R143 million, including R57 million in bonuses, what are the relevant details regarding how agreement on these bonuses were reached;

(2) whether these bonuses were tied to any performance targets; if not, why not; if so, what targets?

Load shedding News – DA calls for detailed timetable on electricity tariff hikes

The Democratic Alliance announced last Thursday that it had written to Public Enterprises Minister Alec Erwin asking him to publish a detailed time-table reflecting the proposed magnitude and time frame of price hikes over the next three years.

“We have also asked for information on how performance bonuses are determined and furthermore, for a firm commitment that no performance and bonus shares will be paid at the end of this month,” said party public enterprises spokesperson, Manie van Dyk.

“Eskom and the government’s inability to fix on a clear proposal for electricity price increases is doing little to mitigate the damaging effects of the crisis on corporate South Africa and the greater public.”

Parliamentary question on Eskom’s demand for diesel

One of the concerns about the energy crisis and Eskom’s inability to meet demand was that it might have a knock-on effect on fuel supplies, notably diesel. Here is the DA’s question to the Minister of Public Enterprises about Eskom’s management of its demand for diesel and his reply:

Dr S M van Dyk (DA) to ask the Minister for Public Enterprises:

(1) Whether Eskom’s demand for diesel for diesel-propelled power generators has increased since January 2007; if not, what is the position in this regard; if so, to what extent has it increased;

(2) whether Eskom consults with the SA Petroleum Industry Association (Sapia), the Fuel Retailers Association and PetroSA to ensure that sufficient diesel is available for all sectors of the economy; if not, why not; if so, what are the relevant details;

(3) whether Eskom, as one of the biggest consumers of diesel, expects that more diesel will be required in the following three to four months and notified the suppliers in advance of this increased demand so that more diesel can be imported; if not, why not; if so, (a) what are the relevant details and (b) what is the indication of diesel requirements for the rest of the year;

(4) whether Eskom foresees that the agricultural industry will have to curtail its demand for diesel in any way in order to accommodate Eskom’s requirements; if not, what is the position in this regard; if so, what are the relevant details;

(5) whether the pipelines from harbours will be able to cope with t he increased demand for imported diesel (oil); if not, what measures have been introduced to ensure that Eskom can deliver sufficient diesel to its plants.

Parliamentary question on Eskom coal shortages

You might have noticed last week that we added a ‘Parliamentary questions’ category on the blog. Today, we add our first post in that category with a question to Minister of Public Enterprises Alec Erwin, followed by his reply:

Dr S M van Dyk (DA) to ask the Minister for Public Enterprises:

(a) Since what date has Eskom been experiencing a coal shortage, (b) why was and is this shortage still experienced, (c) what was the shortage, (d) how much coal does Eskom currently receive, as opposed to how much it needs and (e) what has Eskom done to solve this problem since the shortage came about;

(a) Why did he and Eskom ignore the warnings regarding the problems with acquiring coal and the condition of the roads, which have been mentioned in a number of Eskom’s annual reports since 2003, and (b) why did Eskom lower its coal stockpile;

Whether Eskom will change its tender policy for coal in the light of specific problems mentioned in its 2007 annual report (details furnished); if not, why not; if so, what are the relevant details;

(a) How many contracts of former coal suppliers were cancelled or not renewed or considered since 1998; (b) (i) how many and (ii) which new emerging firms have received contracts in order to achieve the goals of black economic empowerment (BEE) and (c) how many of the new BEE firms have met their contractual obligation to deliver sufficient coal on time to Eskom?

Load shedding News – Eskom Bonuses, development stoppages and the minister’s salary

STOP BONUS PAYMENTS TO ESKOM MANAGEMENT!

The Democratic Alliance has slammed the proposal that shares to the possible value of R10m be awarded to Eskom management.

DA spokesperson on public enterprises Manie van Dyk said the awarding of such shares would be outrageous, given that South Africans were bearing the brunt of extreme negligence on the part of Eskom management.

Van Dyk would be writing to the Minister of Public Enterprises and the chief executive officer of Eskom in an effort to prevent these bonuses from being paid out.

“This money should rather be diverted into Eskom’s coal procurement or capital expansion plan.”

A lack of planning has seen massive rolling blackouts sweeping across South Africa, and the economy being hit because big industry it cannot reach its production targets. Citizens have also been trapped in lifts and in huge traffic jams amid periodic shortages of electricity.

An group calling itself the Powergroup has started an online petition to stop Eskom from paying bonuses. Click here to sign the petition.

DA presses Eskom CEO about development stoppage