Eskom hikes: 'ANC to coin it'

Cape Town - There are "compelling reasons" to believe the ANC will benefit from Eskom's proposed electricity tariff hikes, a Democratic Alliance MP claimed on Thursday.

Sejamothopo Motau said the ANC would earn billions of rands through its investment arm Chancellor House after a "flawed" multi-billion rand tender to build a boiler for Eskom at Limpopo's Medupi power station.

"The array of information available now in the public domain provides compelling reasons to believe that the ANC will benefit from higher Eskom tariff hikes," he said in a statement.

Hitachi, in which Chancellor House hold a 25% stake, won a tender to build the R20bn Medupi boiler in Limpopo in 2005. The ANC's share of the deal was worth R5.7bn.

Eskom has proposed increasing its tariffs 35% a year for three years to fund its expansion programme. The National Energy Regulator of SA is currently holding hearings on the proposed increase.

The ANC's treasurer Mathews Phosa had promised to take steps to disinvest the party's interest in Hitachi, which makes products ranging from home appliances to industrial machinery.

Earlier this week ANC secretary-general Gwede Mantashe said there was nothing wrong with the party holding a stake in Hitachi.

Motau said several documents were now available publicly demonstrating the Hitachi tender was flawed.

"Last year, for instance, we released a confidential Eskom memo detailing how Hitachi's submission was relatively less applicable than the Alstom submission.

"Likewise, the Eskom letter leaked in 2008, entitled 'Summary of the Medupi Tender Process', demonstrates that the award of the R20bn Medupi boiler contract should have been granted to the Alstom-Steinmuller (SUBS: umlaut on the u) consortium, and not to the Hitachi consortium."

Motau said Eskom had ensured Hitachi no longer had to compete with other suppliers for tenders.

"As a consequence, for every coal power plant that is now constructed, Hitachi's shareholders, including the ANC are ensured greater revenues."

Motau said the ANC would be favoured at the Nersa hearings because it would not be making a private submission.

"One can only imagine that this is because, while the ANC says in public it is concerned about price hikes, behind closed doors it is actually in favour of them.

"It is looking increasingly likely that the overarching goal remains to get as much money to Luthuli House. Again, the implication is that the so-called 'developmental state' model is nothing but a way to channel funds to the ANC."

Motau said the revelations "must call into question" Eskom's bid to raise electricity tariffs.

"We have already seen submissions by business and labour representatives that demonstrate how such a move would be disastrous for the South African economy.

"The only people who appear to stand to benefit are the ANC. The only way they can demonstrate that this is not the case is by disinvesting from the firm that stands to gain from these power hikes."

Motau said Mantashe's claiming there was nothing wrong with the party's interest in the company showed "a disregard for the interests of a democratic society and the constitutional principles of accountability and transparency.

"The fact is that, under the present state of affairs, there is no incentive for the ANC government to save money. On the contrary, as South Africans pay more money to parastatals such as the SABC and Eskom, the ANC only stands to make more money."

Lance Greyling, a member of the Independent Democrats, said earlier this week that much of Eskom's proposed 35% hike would be used to fund the construction of Medupi and the Kusile power station in Mpumalanga.

He said the largest component of the expenditure was for boilers for the two power stations, a contract worth R38bn in 2008.

Current estimates were that costs had risen from R78 billion to R120bn and R85bn to R142bn for Medupi and Kusilerespectively.

The ANC could not be reached for comment.

- Sapa