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Gordhan praises Eskom executives amid costly power blackouts crippling the economy

Public Enterprises Minister Pravin Gordhan

Public Enterprises Minister Pravin Gordhan

Published Jul 4, 2022

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Cape Town - Despite Eskom plunging the country into unprecedented stages of blackouts, and costing the country’s ailing economy billions of rand, under-fire Eskom chief executive Andre de Ruyter and COO Jan Oberholzer are performing well beyond their performance agreements.

This is according to Public Enterprises Minister Pravin Gordhan who further claimed that De Ruyter and the management knew what they were doing in turning around generation performance.

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However under their leadership Eskom burnt diesel to the tune of R5.3 billion to keep the lights on since January. This is 27 times the amount of diesel than it used in the whole 2016-2017 financial year when former executive Matshela Koko was at the helm.

Under-fire Eskom chief executive Andre de Ruyter. Picture: Sumaya Hisham/Reuters

In a recent reply to parliamentary questions from EFF MP Omphile Maotwe, Gordhan said under De Ruyter and Oberholzer there had been a dramatic improvement in Eskom’s performance with an 85% improvement in earnings before interest, tax and depreciation.

“Eskom has also successfully reduced debt to R396 billion, from a previous high of R440 billion,” he said.

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Gordhan also said the explanation given by De Ruyter that he expected load shedding to happen for 295 days in the next 12 months has been sufficient.

“I have got confidence of Eskom CEO and management to turnaround Eskom’s generation performance and reduce load shedding that is affecting our economy.”

In June alone, Eskom spent R1.54 billion against the budget of R700m.

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In a separate reply to GOOD MP Brett Herron, Gordhan said Eskom burnt 272 911 112 litres of diesel to the tune of R3.8 billion between January and May.

Herron said Eskom used 27 times the amount of diesel in the first five months this year than it used in the whole 2016-2017 financial year, at the height of state capture.

Eskom COO Jan Oberholzer

He said the staggering number excluded revelations by De Ruyter that the company spent another R1.54 billion on diesel in June 2022 alone.

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“If you add that to the R3.84 billion Gordhan said had been spent in the first five months of the year, it means Eskom burned R5.3 billion worth of diesel in the first half of the year,” Herron said.

He also said Eskom’s dependence on burning diesel was laid bare at Friday’s briefing by its executives, with its ability to procure enough diesel stock evidently regarded among its key performance indicators.

Herron noted with concern that Gordhan revealed two years ago that Eskom consumed 10 million litres of diesel in 2016-2017 to keep its open cycle gas turbines running to the tune of R340 million and R320 million in 2017-2018.

“To put these numbers in perspective, that’s R320-R340 million five and six years ago compared to R5 300 million in the first six months of this year.”

Gordhan said Eskom has implemented load shedding for 50 days from January 1 until June 2.

“Five days were at Stage 1, 35 days were at Stage 2, four days were at Stage 3, and six days were at Stage 4,” he said.

The minister said the board, management and staff were being directed to make energetic and urgent efforts to avert as much load shedding as possible.

Gordhan said Eskom's worst-case scenario was the assumption of unplanned unavailability between 13 500 megawatts and 15 000 megawatts for winter and between 14 500 megawatts and 16 000 megawatts for summer.

“This shows that 104 days of load shedding could be expected in the 2022 winter and 191 days of load shedding could be expected in the 2022-23 summer.

“These result in a total of 295 days of load shedding,” he said.

He also said the generational recovery plan, including maintenance recovery programme, has been implemented to improve generation performance.

“Eskom has been implementing a defects correction mechanism plan to improve the energy availability factor at Medupi and Kusile power stations. Eskom will require additional capacity of between 4 000 megawatts to 6 00 megawatts to minimise load shedding,” Gordhan said.

Cape Times

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