Media release. For immediate distribution.
13 May 2018
The Soweto NERSA hearings into Eskom’s record-breaking R66bn RCA claim (Regulatory Claim Account) took an unexpected turn on Friday when Eskom was forced to present responses to accusations of fraud, corruption and poor execution.
After Eskom’s avoidance of the issue, Ted Blom, a partner at Mining & Energy Advisors and Energy Expert Coalition, launched a devastating attack by again highlighting the hundreds of billions of rand lost to questionable spending and corruption. Blom, who revealed the extent of corruption inside Eskom after travelling to Nersa’s Cape Town hearings in April, states “This has been a 10-year fight where Eskom have resisted at every step. I am pleased to say Nersa forced Eskom’s hand on Friday by demanding the issue be addressed in closing comments”. NERSA then insisted Blom present further arguments at the final hearings on Monday, 14 May.
Eskom reluctantly admitted corruption could have had a hand in their Tariff increase application but insisted that since the investigations are now imminent, Nersa should allow the increases. Eskom further noted they would voluntarily apply to Nersa to reduce tariffs in future once investigations had been wound up.
“While this is a major victory towards lower tariffs, there are still plenty battles to close,” states Blom, “we are heading towards a battle in the courts and are going to need the public behind us”.
It is unfortunate Eskom has to be dragged every inch of the way towards full transparency as there is still no mention of the Dentons report. Such resistance from Eskom senior management suggests corruption is still hidden from the SA public. The fact is the corruption alone amounts to over R800bn, plus there is still the consequential cost of abysmal decision-making Eskom admitted to on Friday.
Eskom further admitted to not being ready for the new build program in 2004 and had used Majuba, an old technology station as the starting block for the design of Medupi and Kusile – Africa’s first supercritical type power stations. According to Eskom, this decision was responsible for the enormous cost escalation from an initial quote of around R34bn for each of Medupi and Kusile, to the current R170bn per station.
Blom, however, is having none of this. “I do not trust Eskom at all”, says Blom, “They have had many opportunities to come clean. City Power calculated that Eskom’s overspend on coal for the three years under review exceeds R16bn. This occurred at the same time the Gupta frauds were committed,” states Blom.
“I cannot allow Eskom to be player and referee in this game,” argues Blom, “I want an independent entity which is aware of all these intricate frauds, to be nominated as watchdog”.
Blom makes it clear that as the frauds on face value amount to more than the R66bn RCA claim, no increase in tariffs can be allowed until a full independent forensic is completed.
“Halting this RCA tariff increase will also assist the Legal commission of enquiry into Eskom and will widen its terms of reference to include suspected corruption pre-2008,” Blom states.
“All South Africans need to get behind this worthy fight as a court victory will benefit all citizens or business owners and will reignite our economy,” insists a brave Blom.
Partner: Mining & Energy Advisory, with the Energy Expert Coalition (EECO)
Tel 082 857 2534