It is unacceptable that six years after the last energy crisis, Eskom has still not managed to adequately increase its capacity to supply the energy that SA’s economy needs, the DA’s leader Helen Zille said on Monday.
She announced the DA’s plans on how to stop load shedding both now and in the future.
“Rolling blackouts will have a major impact on SA’s economy and will inevitably result in job losses,” she said in a statement.
“With our economy already growing so slowly, and facing many internal and external pressures, these blackouts should rightly be considered a national crisis.”
Zille said South Africans deserve answers and that President Jabob Zuma’s administration must accept accountability for the situation.
Eskom has indicated that load shedding is unavoidable for several months if not years to come, or at least until Medupi Power Station is operational.
“Load shedding has a devastating effect on the economy, especially in labour-intensive industries,” said Zille.
“In 2008 the blackouts cost the country an estimated R200m per day. The cost is likely to be nearly double that amount today.”
She said the worst about the present energy crisis is that it was entirely avoidable.
“For several years South Africa has been told that excessive electricity price increases were necessary precisely to avoid further blackouts,” said Zille.
“There is a further 8% average increase in electricity prices scheduled for 1 April 2014. While Eskom and government do not deliver on their mandate, consumers have no option but to pay ever higher electricity prices.”
She said another negative side to the crisis is that, often, to prevent blackouts, Eskom pays SA’s biggest electricity consumers – productive businesses – to shut down production just at the time that SA needs economic growth most.
She blames the government for “consistently shifting the blame – most recently blaming wet coal”.
Zille said the DA’s plan to deal with the crisis would include an investigation into the bonuses awarded to Eskom executives in 2013.
Eskom executives awarded themselves R17m in performance bonuses in 2013 and R14m in 2012, according to Zille.
She said the DA will request a full National Energy Regulator of South Africa (Nersa) investigation – like in 2008 – into the causes of the current electricity supply shortage, including recommendations of who should be held accountable.
The DA will also look into all contracts relating to the Medupi power station project.
Since July last year the DA submitted an application for access to all the contract documents.
“However, we have still not received the documentation and have now submitted an appeal,” said Zille.
The Medupi project was initially planned to be operational by the end of 2012, but has since had its commission deadline shifted three times.
The latest extension schedules completion for mid to late 2014.
Medupi’s initial price tag was R90bn, but the final price tag with financing costs looks set to come in at around R150bn, according to Zille.
“Since the 2008 crisis, the DA has been calling for policy and legislative amendments to dismantle Eskom’s monopoly as the sole purchaser of electricity in South Africa,” said Zille.
“This would allow Independent Power Producers (IPPs) to feed into the national grid, or to feed power directly to consumers, thereby reducing pressure on Eskom’s generation capacity.”
She said the DA will also request Parliamentary hearings to review the preferential supply agreements that South Africa has with neighbouring countries.
“It is unacceptable that we continue to supply electricity to neighbouring countries when we cannot supply our country sufficiently,” said Zille.
South Africa currently supplies power to Botswana, Namibia, Lesotho, and Swaziland on a regular basis. We also supply to Zimbabwe and Mozambique when their grids require it, as well as to a number of large private industrial clients outside of South Africa.
“Eskom reportedly exports 5.9% of its total generating capacity – more than 2 000MW, or enough to have prevented the large majority of last week’s blackouts,” said Zille.
“The DA will seek assurances from Chancellor House that it has not profited from the sale of its stake in Hitachi Power Africa. If this were so, as we strongly suspect it is, then the ANC’s election campaign is being funded from the profits of a company at the centre of this crisis.”
Hitachi Power Africa was until recently partially owned by what Zille calls the ANC’s business front, Chancellor House.
“When Chancellor House paid R6m for its stake in HPA in 2009, it seemed a questionable investment. At the time HPA was a newly formed entity and had no contracts, no clients, and no track record,” said Zille.
“Curiously, just a short while later, HPA was awarded a R38.5bn contract for the installation of boilers at Medupi. In February Chancellor House sold its stake in HPA for undisclosed amount.”
The DA maintains that this is corruption.
“During a sitting of Parliament last year, DA MP Natasha Michael asked the President about government’s plan to prevent rolling blackouts. The President denied that there was any energy crisis,” said Zille.