Engineering News, 30 May, 2017
Business Unity South Africa (Busa) has heavily criticised what it describes as Eskom’s request for a “blanket condonation” from the National Energy Regulator of South Africa (Nersa) to deviate from the multiyear price determination (MYPD) methodology and minimum information requirements for tariff applications (Mirta).
In a letter to Nersa earlier this year, Eskom CFO Anoj Singhindicated that the State-owned utility would be submitting a one-year revenue application for 2018/19 on June 1. However, he also indicated that Eskom would be unable to meet certain requirements of the MYPD methodology, as updated in October 2016, as well as certain Mirta requirements…
… Eskom’s application, Busa added, was an attempt to motivate for price increases without justification, which undermined good governance and accountability…
… COAL PROCUREMENT IN FOCUS
In an earlier criticism of Eskom’s deviation application, the Organisation Undoing Tax Abuse, or Outa, challenged Nersa to hold public hearings, describing Eskom’s application as an attempt by the utility to “maintain secrecy on the coalsuppliers, qualities and prices”.
The issue of coal supply has come under intense scrutiny since the release of the ‘State of Capture’ report by then Public Protector Thuli Madonsela last year.
The report recommended that President Jacob Zumaestablish a commission of inquiry to further interrogate “observations” of possible corruption at Eskom and several other State-owned companies, and raised particular concern about contracts between Eskom and Gupta-family-linked coal miner Tegeta.
The report states that Eskom’s R659.6-million prepayment to Tegeta to facilitate coal supply to the Arnot power stationmay not have been in line with the Public FinanceManagement Act, as prepayment was not used to fund Optimum coal mine (OCM) operations, but rather to fund the purchase of all shares in Optimum Coal Holdings (OCH).
It notes that, on April 11, 2016, Tegeta informed the businessrescue practitioners and Glencore, which, in turn, informed the loan consortium, that they were R600-million short. On the very same day, Eskom held an urgent board tender committee meeting at 21:00 to approve the R659.6-million prepayment.
Here is the full article