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Top exec to challenge Eskom

Mar 11 2010 12:51 Marc Hasenfuss

Company Data

Bowler Metcalf Ltd [JSE : BCF]

Last traded R8.95
Change R0.05
% Change 0.56%
Cumulative volume 19,130
Market cap R791.43m

Last Updated: 13/02/2012 at 12:25. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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Cape Town - Cape-based packaging firm Bowler Metcalf [JSE:BCF] is set to take on Eskom over secret "sweetheart" deals given to certain large industrial clients.

Bowcalf CEO Mike Brain told Fin24.com he was outraged at the recent admission that Eskom had cut so-called sweetheart deals with large industrial clients, which enjoyed a preferential rate of electricity supply.

"I am indignant that my company must sponsor the profits of other commercial entities that are quoted on overseas stock exchanges."

According to a report in Thursday's Cape Times, Eskom told parliament earlier this month that there were 138 "big" companies that paid lower tariffs for power through special price agreements.

The Cape Times also reported that the Cape Chamber of Commerce had called for a "full and transparent" investigation into Eskom's sweetheart deals with the aluminium industry.

Case for competition authorities

Brain said Bowcalf, which has profitably worked a specialist plastics packaging niche since listing on the JSE in the late 1980s, could not afford to carry the cost of Eskom's operational and administrative inefficiencies.

"Our electricity bill is already R1m every month. The proposed 25% tariff hike will add another R3m onto our electricity bill every year."

Brain believes many smaller industrial entities currently share Bowcalf's concern around Eskom's pricing policy for industrial clients.

"Eskom's sweetheart deals are anticompetitive with a capital A. I am definitely going to try rallying support, starting today with the Plastics Federation. Something stinks, and we simply can't just sit back."

Brain said Bowcalf's efforts would focus on forcing Eskom to come clean about preferential rate deals with certain clients. "It sounds like a monopolistic situation, and something that should be debated in the public domain. The competition authorities have shown lately that they can be very effective."

- Fin24.com

 
 
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