Brian Molefe returns as chief executive of Eskom

BusinessDay, 12 May, 2017

Board spokesman Khulani Qoma confirmed his return in an interview on Talk radio 702

Board spokesman Khulani Qoma confirmed his return in an interview on radio 702 www.702.co.za on Friday.

“Definitely‚ he is coming back on Monday‚” Qoma said.

Molefe has resigned as an MP in order to resume his former position.

His return was sparked by a dispute over a reported R30m pension payment that he was awarded after he announced in November that he was stepping down “in the interest of good corporate governance”.

The Sunday Times revealed that he was awarded the hefty “golden handshake” despite being at the power utility for only 18 months.

Public Enterprises Minister Lynne Brown said shortly afterwards that there was no justification for the payment.

(Ed. note: I wonder what Lynne Brown is up to? Trying to save the R30m, getting rid of Koko, looking for another way to get rid of Brian, but without the handshake – waiting for the State Capture report to implicate him so he can be fired?)

Qoma said the Sunday Times story had resulted in Brown instructing the board to review the payout and come up with a mutually acceptable agreement. “We could not agree … so a decision was made to rescind the initial decision by the board for a pension payout.”

That effectively nullified his resignation and he would return to work on Monday‚ he said.

Molefe resigned from Eskom after it was revealed in the State of Capture report by former public protector Thuli Madonsela that he had exchanged 58 calls with Atul Gupta.

The report also detailed how cellphone records had placed Molefe in Saxonwold‚ the Gupta residence in Johannesburg‚ several times around the time of the controversial Tegeta-Optimum coal mine deal signed with Eskom.

Eskom chairperson Ben Ngubane said he was “absolutely delighted” to have Molefe back.

Op-Ed: Eskom, a slow-moving train wreck

Daily Maverick, Dirk de Vos, 12 May, 2017

The South African government, it seems, loves policy-making space and resists anything that would constrain this space. It is therefore a pity that very little policy, good or bad, gets to be implemented. Part of the problem is the top-down approach to policy-making. It means that while we get a never-ending supply of policy documents, too little consideration is given to “the facts on the ground”

Not paying attention to practical implementation makes us vulnerable to poor ideas such as pursuing a nuclear build programme that keeps returning, zombie-like. A recent contribution by Rob Turrell using advice given to the Minister of Science and Technology by the respected National Advisory Council on Innovation (NACI) shows that practically speaking, South Africa simply does not remotely have the capacity to participate meaningfully in any nuclear programme.

As an investment company, Eskom is a slow-moving train wreck. A big part of the problem are the disastrous Medupi, Kusile and Ingula projects, its existing debt and the funds it is yet to borrow. Chris Yelland did a convincing calculation of the massive (up to now) cost over-runs and then the price at which Medupi and Kusile would have to supply electricity to the grid if they were stand-alone operations.

In short, the price that they could supply the grid when (if) they are completed is well above Eskom’s own selling price for electricity. Eskom disputes Yelland’s calculations but refuses to disclose the details of its own. It should be noted that Eskom cannot even provide the required information to the regulator to enable it to make a tariff determination. Bluntly, Eskom is borrowing to continue financing the construction of stranded assets. …

Here is the full, depressing article

Structure of the market needs to be revised to ensure least-cost energy

BusinessDay, Anton Eberhard, 9 May, 2017

The battle for SA’s nuclear and energy future is not over. While many South Africans welcomed the decision by the High Court in Cape Town setting aside international nuclear energy treaties and declaring the government’s nuclear procurement programme unlawful and unconstitutional, President Jacob Zuma and his allies have not given up. Ultimately, the structure of SA’s power market will need to change to ensure an optimal and least-cost energy mix.

Reforming the power sector will be the more important struggle.

Unfortunately, the court’s nuclear decisions were essentially around procedural issues and it declined to rule on substantive matters, such as the rationality of procuring nuclear power when the government’s own updated electricity plan says it is not needed.

Here is the full article

 

A Summary of The Nuclear Deal, Why It Failed and What This Means For South Africa.

Global Carbon Exchange, 5 May, 2017

Everyone should know that, for now anyway, the programme has effectively been sent back to the drawing board (hopefully not that same one that “crafted” the last programme).

Perhaps a bit of history is needed to get to grips with all the failings of the Nuclear Programme.

Here is the full article

Op-Ed: Can any South African Nuclear Energy Procurement ever Succeed?

Daily Maverick, Dirk de Vos, 5 May, 2017

Should the whole nuclear energy procurement process start up again, the few nuclear vendors that still remain should ask themselves: is it really worth the bother? By DIRK DE VOS.

As most of us know, the recent Cape High Court decision in favour of the applicants, Earthlife Africa Johannesburg (ELA-JHB) and the Southern African Faith Communities’ Environment Institute (SAFCEI), to set aside nuclear procurement agreements was an utter thumping.

All South Africans owe a debt of gratitude especially since both NGO’s operate under significant financial constraints (donations can be made here) and for some, this was a replay of the David and Goliath story in the book of Samuel. Malcolm Gladwell’s take on that story is worth retelling.

Gladwell suggests that David was never going to lose that battle. Firstly, he was an adept slingshot and a stone from his sling had the stopping power of a .45 calibre pistol. Secondly, Goliath, the giant, may have suffered from acromegaly, an affliction of many giants, that causes partial blindness. So, you have a lumbering (large) target who cannot see well against a highly adept boy with his slingshot. The outcome was not in doubt. In sporting terms, the Cape High Court decision was like a 10-0 score line in soccer or, in a cricket test, an innings defeat on the second day. We are yet to see whether the new Minister of Energy will appeal the decision but it is hard to see how a “rematch” in any higher court will result in a different outcome.

Briefly, the court’s decision did two things. It set aside the previous Minister of Energy’s decision to proceed with the procurement of nuclear energy due to a number of flagrant departures from section 34 of the Electricity Regulation Act (ERA), which governs how such determinations should be made. It also set aside the Russian Nuclear Agreement as it should have – and did not – receive Parliamentary approval as required by section 231(2) of the Constitution. This agreement purported to create a number of obligations and liabilities for South Africa (including taking on all liabilities for a nuclear accident). The Constitution requires that these types of agreements with substantive impacts be approved by parliament. More basic framework co-operation agreements with the USA and South Korea – which, being of a more technical, administrative nature, did not require parliamentary approval – were also set aside on the basis that they were not tabled in parliament within a reasonable time, as required by section 231(3) of the Constitution.

The most striking thing about the judgment is not the decision itself, but just how underhand, dishonest and profoundly inept the government has been in the whole affair. In a sense, they were worse off than Goliath – it was almost a process of self-sabotage. “Oh well”, says the nuclear lobby and in particular, NECSA – which by the way has just secured 85% of the total budget of R787 million allocated to nuclear by the Department of Energy for the next financial year, “the court decision said nothing about the wisdom of procuring nuclear energy as such and South Africa should just start the nuclear procurement process from scratch”. That is true. The court’s decision was mostly about procedural matters, but it raises an important question: could procuring nuclear power ever be done legitimately in a way that satisfies the Constitution and the rule of law? It’s an important question because the answer should guide whether anyone, especially taxpayer-funded entities, should bother even trying.

The answer is no and this is why. The Constitution was not drafted to prevent South Africa from procuring nuclear power, but, given the state of the nuclear energy sector in 2017, it makes it extremely difficult, if not impossible. It is perhaps this very reality that has driven the underhandedness that we have seen.

Here is the full article