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Johannesburg - Eskom chief executive Jacob Maroga was warned by an international energy expert that the utility was heading for a coal crisis, six months before the power crisis paralysed the country in January last year.
The expert, Susan Olsen, a partner at Wingfield Consultancy, a world-renowned oil and coal research group in Boston, Massachusetts, warned Maroga in a comprehensive report on the deterioration of the energy giant's coal stocks that the parastatal was heading for a crisis.
Kobus Schmidt, a DA member of Parliament, handed over the damning report to Elizabeth Thabethe, the chairperson of the Portfolio Committee on Energy.
Olsen researched the issue for Eskom for two years, but her contract with the parastatal was abruptly cancelled within days of sending the report to Maroga and following an interview with him on the issue.
In it she points out how long-term coal contracts, also known as "cost-plus contracts", made it possible for the country's big mining houses to exploit Eskom while enjoying every possible form of security for healthy returns on their investments.
She warned that Eskom's ageing power stations were unable to work at 100% generating capacity with the cost-plus contracts.
The growing demand for electricity, the coal shortages and coal quality problems did not occur overnight. But Eskom, which should keep its fingers on the pulse and ensure adequate coal stocks, neglected to react accordingly, declares Olsen's report.
Eskom's lack of experience and understanding of coal markets lead, says Olsen, to unfavourable and unsustainable contractual conditions.
"Two decades ago already, in the apartheid era, Eskom accepted a stipulation by the mining houses that geological risk would be solely for Eskom's account.
"In today's world "geological risk" means nothing more than incomplete, and at worst deceptive, statements regarding [coal] reserves," the report continues.
Olsen sent a report to Maroga on July 19 2007 and a couple of days later had an interview with him.
She could not be reached for comment on Thursday but, according to an acquaintance who worked with her in South Africa, she had described the interview with Maroga as "a waste of breath".
Unacceptab;e lows
In its audit on the electricity crisis Nersa says that coal supplies at Eskom's power stations have fallen to unacceptably low levels since August 2007.
The Nersa audit, to date the only official investigation into the cause of the crisis, found that coal shortages and the poor quality of the coal played the crucial role in the electricity crisis crippling the country in January 2008 and bringing the mining industry to a standstill by January 25.
At the time Nersa reckoned that the crisis had cost the country R50bn-odd in lost production.
Confidential reports on conditions at power stations during the height of the crisis from January 25 to January 29 in 2008 also show that coal problems were responsible for the great majority of power interruptions.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.