Eskom can’t afford to pay independent power producers

Eskom can’t afford to pay independent power producers

2015-03-26 12:47

Cape Town - Eskom’s cash flow is not strong enough to renew contracts with independent power producers who fed almost 800 megawatts into the national grid over the past two years.

This is one of the reasons the mandate of the electricity crisis "war room" was expanded this week to include control of the utility’s financial affairs.

Meanwhile, yet another strike erupted at the Medupi power plant on Wednesday, while several meetings were held to address the electricity crisis.

READ: Eskom shuts down Medupi over strike action

Brian Day, an energy consultant for private power generators, told an electricity conference on Wednesday that they had been told by Shaun Philips, a director-general in the Presidency, that the war room’s mandate has been extended to cover finances.

There are, however, serious legal questions about intervention in Eskom’s management, and the role Public Enterprises Minister Lynne Brown is playing in its leadership battles.

The board met at Eskom’s Megawatt Park headquarters last night to discuss the position of chairperson Zola Tsotsi. Some board members are unhappy about his leadership.

READ: Eskom's Tsotsi faces vote of no confidence

Board members met Brown on Friday and thereafter called Wednesday’s meeting.

meanwhile, suspended CEO Tshediso Matona is in the labour court now after filing a dispute with the Commission for Conciliaiton, Mediation and Arbitration (CCMA).

LIVE: Eskom CEO Matona challenges his suspension

The CCMA said in a statement it would begin conciliation and keep those involved informed.

Brown told Parliament’s public enterprises portfolio committee she is empowered by legislation, including the Companies Act, to intervene in decisions of the board.

READ: State of affairs at Eskom worries Brown

She was grilled over Tsotsi’s leadership.

"You are going to ask me why the chairperson is still the chairperson. I have not been formally informed. The board must inform the minister what they want to discuss about a member. Then the minister must give permision for the discussion."

  • Jon van der Heever - 2015-03-26 14:47

    They have no money, yet they increase tariffs and the workers are striking for bonuses? How does this make ANY sense?

  • Mark Crozier - 2015-03-26 15:48

    Oh my hat... this is beautiful. There's not enough electricity to run the country but they can't 'afford' to pay IPPs to produce it. And yet somehow they CAN afford to run turbines on diesel 24/7!

      Ian Flack - 2015-03-27 07:20

      Why buy electricity from IPPs when the Dentist and Beautitican can benefit from supplying diesel?

  • Paul Nel - 2015-03-26 17:27


  • Henry Michael Gould - 2015-03-29 18:27

    The managing and running of Eskom should be out sourced to competent consultant's and contractors. The improvement will be felt within a month. But that will never happen. To may family and friends will be replaced or made redundent.

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