Low revenue dims Eskom's appetite for risk

Eskom has cut investment plans because of lower revenue.

It reduced planned capital expenditure to R56.4-billion for the year to March, from a previous estimate of R61.9-billion, the Treasury said in its annual budget review yesterday.

Infrastructure spending is expected to total R151.7-billion in the next three fiscal years.

Eskom needs to find R191-billion to fill a funding deficit created after the national energy regulator allowed it to raise prices by an average of 8% in each of the five years to March 2018 - half of what the utility requested.

Last week, Eskom twice used emergency measures to ask large industrial users to cut power consumption after four generating units went down for unplanned maintenance.

The government was still evaluating proposals to build a third coal-fired plant, and no funding had been set aside for it in the current three-year budget, Deputy Finance Minister Nhlanhla Nene said yesterday.

Major state companies will spend R381.9-billion in the three years to March 2017, the Budget showed. Eskom, the South African National Roads Agency and Transnet will account for 90% of expenditure.

• The strike at the three largest platinum producers has cut power demand at mines, a silver lining for an electricity system that is under pressure.

"Demand from the platinum sector is down by about 400megawatts," said Andrew Etzinger, spokesman for Eskom. That was 17% below typical usage levels, he said.

Workers at Anglo American Platinum, Impala Platinum and Lonmin, who belong to militant union Amcu, have been on strike for more than a month in a dispute over pay.