A web of political cronyism at play

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AN Eskom conspiracy theory and stage 3 load shedding may finally have woken up the country to the realities of the utility’s meltdown. Late in 2014 the writing was on the wall: I assembled what little unplanned outage data Eskom had made public from time to time, and then I drew a trend line. The data predicts total grid failure, with less than 50 percent of generating capacity available, no later than early-mid 2016, irrespective of Lynne Brown’s ministerial mumblings to the contrary. However, the big question is why the situation is still deteriorating, instead of having begun to improve at some point during the last five years. It is easily said that things must get worse before they can improve, but not to this degree or so many years down the road. Management should have recognised the onset of disaster, acted appropriately, and enabled their engineers to take the necessary measures. However, it is now common cause that Eskom has little, if any, of what conventional corporates would recognise as management, much less a meaningful board of directors. That said, engineers are a generally resilient and resourceful bunch, and one would expect them to get on with the job themselves, at least as far as available facilities and faculties permit. Meanwhile, it cannot escape notice that the Matimba power station, way out in the bundu with its coal solely supplied by the Grootgeluk mine, is never cited as having unplanned outages.

This compares with the frequent failures of the Duvha, Majuba, Kendal, Tutuka, et al power stations, all in Mpumalanga and all supplied by a horde of junior coal producers (owned by the usual crowd of politically connected individuals), similar to the way in which the gas turbine power stations are supplied with diesel by dentists and beauticians.

Of course, the coal supplies are based on principal supplies from the major producers, such as BHP Billiton and Exxaro, and one assumes that those supplies are largely unaffected by Eskom’s problems, while a power station’s reduced coal consumption results in the junior producers being preferentially instructed to halt coal deliveries, to prevent coal storage capacity being exceeded.

The upshot is that the junior producers are still paid for the undeliverable coal on a contractual “take or pay” basis, very much to their financial advantage and Eskom’s cost. This scenario explains why Eskom has had considerable problems with controlling the cost of coal supplies, with the average prices paid approaching those paid for export grade coal, while Eskom actually consumes low-grade coal unfit for export.

It also means that it is very much in the interest of the junior producers to subvert a power station’s technical staff to allow, if not cause, the failure of generation units. This suggestion borders on outrageous, but no more outrageous than the Nkandla scam, the Marikana massacre, or the SA National Roads Agency Limited’s imposition of e-tolls on Gauteng’s freeways.

A component of the inquiry into Eskom’s management should be lifestyle audits on influential power station personnel, as well as publication of the entire roster of coal suppliers contracted by Eskom. The latter would allow the press to uncover the web of political cronyism at play and eventually join the dots of the Eskom puzzle which, incidentally, includes no point tagged with “old, worn-out power station”.

Roger Toms

Hout Bay