AfriForum lashes Eskom corruption and maladministration in commentary

AfriForum today submitted its written comment on the electricity tariff increase that Eskom requested for the 2019/2020 financial year to the National Energy Regulator of South Africa (NERSA). The civil right organisation maintains that the costs for Eskom’s alleged corrupt activities and mismanagement should not be included in the calculation of the coming year’s electricity tariff.

Eskom applied for an increase of 15% for the 2019/2020 financial year. The application comes amid a series of investigations finalised by National Treasury into violations in terms of the Public Finance Management Act, 1999.

“Eskom requests this tariff increase while increases from previous regulatory clearing account applications will also be implemented from next year to include R8 billion. One would hope that the new management really wants to turn the situation around, but the mid-year report’s statistics indicate that Eskom’s management is not really improving,” says Morné Mostert, AfriForum’s Head of Local Government Affairs.

AfriForum argues that Eskom’s mismanagement cannot be included in Eskom’s tariff increase application and that NERSA is entitled to exclude corruption and mismanagement. The following facts should also be considered:

• Municipal debt in arrears increased with R4,3 billion in the 2018 annual report to R13,6 billion. The mid-year report indicates that this debt has already increased with  R3,4 billion to R17 billion.
• Eskom’s debt in March 2018 comprised R389 billion, which has since grown to R419 billion.
• The employee corps increased from 47 658 in 2017 to 48 628 in 2018.
• During wage negotiations a bonus of R10 000 was paid without explanation to every employee.
• In 2018 irregular spending exceeded R19 billion. This amount is only based on contracts exceeding R25 million.

Dr Eugene Brink, AfriForum’s Strategic Advisor for Community Affairs, says that radical changes must take place if Eskom as a company wants to survive. “The country’s electricity network is already under pressure because of low coal reserves. If the state cannot manage this entity responsibly, Eskom’s monopoly will have to reconsidered. If this does not happen, the country may well find itself in the dark,” Brink says.

AfriForum will make a submission to NERSA on the tariff increase in January 2019.