Back to black: Eskom in cash crisis

AS the Eastern Cape braced itself for the first round of load-shedding for the year, startling revelations emerged on around the financial health of embattled state national utility Eskom and its’ extensive maintenance backlogs have emerged.

Stage One load-shedding was implemented nationally, While Eskom implemented Stage One load shedding nationally, including in the Nelson Mandela Bay and Buffalo City metropolitan areas from , as of 11am yesterday, during which the cash-strapped utility confirmed reports it that cash-strapped Eskom would run out of money by the end of the month.

In addition, the Eskom utility also confirmed to Weekend Post that its financial woes were partly responsible for the continuing rolling blackouts and that its was contending with serious maintenance backlogs dating back as far as 2010.

In a strong reaction to the latest Eskom crisis, the DA emocratic Alliance yesterday called for an urgent sitting of the Public Enterprises Committee ahead of the reopening of Pparliament on February 12 – and for towards taking immediate action to address the issues affecting Eskom and its ability to effectively provide energy services.

In a statement released by Eskom yesterday, Eskomthe utility said “due to high electricity demand and the unavailability of some of our generating units” it had started implementing Stage One load-shedding which would continue until 10pm last night. Stage One allows for up to 1000MW of the national load to be shed.

While Eskom committed to providing regular up-dates on power availability through various media platformsThe utility said it did not anticipate that the load-shedding would continue into today and tomorrow, but that the demands on the grid would be assessed after load-shedding ended at 10pm last night.

In a candid interview with Weekend Post, Eskom spokesman Khulu Phasiwe confirmed Eskom’s financial woes.

“Yes, it is true that Eskom is experiencing financial difficulties. We have a shortfall of around R50-billion. We have approached government and we are in the process of trying to secure R20-billion from government. The rest of the shortfall will be secured from international loans and the issuing of bonds,” said Phasiwe said.

He said that the financial problems had impacted on maintenance and that capital was also sought to complete work at its Medupi, Kusile and Ingula power stations.

“We need money to finish the projects were are currently busy with and funds to buy parts for maintenance. And this includes maintenance from around 2010 that was deferred,” he said.

Phasiwe did not dispute comments made by Public Enterprises Minister Lynne Brown, who on Friday reportedly confirmed that there was “pressure on the company’s liquidity position”.

Brown was quoted as saying that: “Eskom will run out of money by the end of January.” and that "It must still be addressed."

Phasiwe said yesterday’s load- shedding was a result of generators which were not functioning, but that these would be brought back on line and that load-shedding was therefore not anticipated for the weekend.

“Consumers however will play an important role in any load shedding decision and the what stage of load shedding needs to be implemented. If consumers can heed the constant calls to switch off items such as geysers and swimming pool pumps, all non-essential appliances and to conserve their energy use where ever possible, this will greatly assist reduce the demands on the grid,” he said.

Nelson Mandela Bay Metro Municipality communications director Roland Williams reported that his communications office was one of the first victims of load-shedding yesterday when a server based in an area affected by load-shedding went down and it was therefore unable to distribute e-mails to the media on the load-shedding until power was restored.

Williams pointed out thatsaid the metrounicipality iswas unable to predict with any certainty as to when Eskom would announce load-shedding.

“We are normally given between half-an-hour and five-minutes lead time. We have, however, proactively worked out a schedule should Eskom announce load-shedding. It is available on our website at www.nelsonmandelabay.gov.za,” he said Williams.

Williams named major industries (which to ensure trade competitiveness in the region), hospitals and the Port Elizabeth Airport as being among the consumers not affected by load-shedding.

“We have sincere and genuine empathy for all our residents. We understand about refrigerators, babies' bottles and small businesses. Indeed, we are all ... – councillors  and officials of the NMBM and residents and stakeholders – equally affected and frustrated by load-shedding. It is not in the interests of the municipality to make and/or keep our customers and residents unhappy. We are doing our best under extremely difficult circumstances,” he said.

Sizeable parts of East London were also powerless yesterday. Buffalo City Metro (BCM) spokesman Keith Ngesi said at least seven major suburbs had been affected between 2pm and 4pm.

“We implemented a schedule whereby load-shedding is rotated every two hours with different suburbs and areas. While we understand that there will be no load-shedding on Saturday, we do expect load-shedding again on Sunday morning, between 6am and 8am. This will affect parts of East London and most of King William’s Town,” he said. adding that consumers were again urged to use power sparingly as their usage would impact on load shedding decisions and to what extent.

Member of Parliament and DA shadow minister of public enterprises Natasha Michael MP said yesterday that she would be writing to the chairwomanperson of the Public Enterprises Committee, Ms Dipuo Letsatsi-Duba, to request that she urgently call for a sitting of the committee, and summon Minister Lynne Brown and Eskom CEO CEOchief executive officer Tshediso Motana to brief the committee on the latest financial crisis at the cash-strapped utility.

“Given the urgency of the matter, the Ccommittee needs to sit before Pparliament opens on February 12 2015. The Ccommittee should compel the Public Enterprises Minister and the Eskom CEO to take immediate action and to finally acknowledge that South Africa is on the brink of a crisis which, without decisive action, will plunge South Africa into darkness. It is clear that the executive and Eskom are not giving the public the full truth of the crisis at Eskom,” she said.

Accusing Eskom of using a previous government financial bailout to run diesel generators to generate electricity instead of cheaper coal-based options generation, Michael said the utility had gone from bad to worse, while South Africans and the economy suffered.

- Shaun Gillham