The National Energy Regulator of South Africa (Nersa) has moved public hearings on Eskom’s requested 33% tariff hike forward by around two weeks‚ "providing objectors with substantially less preparation time"‚ says energy expert Ted Blom.
Blom‚ a partner at Mining & Energy Advisors‚ said in a statement on Wednesday: "Eskom’s dire financial situation became one of SA’s worst kept secrets when the utility was thrown a 30-day lifeline in February 2018 by the Government Employee Pension Fund – without following proper governance procedures.
When the unions became aware‚ Eskom and the PIC (administrator of the GEPF) denied short-circuiting procedures and promised to repay the R5bn borrowed within 30 days. This loan was refunded on 1 March 2018‚ but with only a paltry 7.2% annualised coupon - a bargain by any lending standards given the urgency and risk attached".
"Should Nersa grant Eskom the R66-billion claimed for past losses‚ it will immediately translate to a 30% hike over and above the 20-30% hike Eskom is believed to be targeting through their mid-year tariff increase application before the end of 2018."
Blom said overstaffing at Eskom‚ "together with abysmal productivity and cost controls‚ has seen Eskom’s tariffs escalated by over 500% in the past ten years and a capital build programme overspend by more than 500% with 6-year delays".