“OUTA cannot accept such high tariff hikes at this stage, despite the fact that Eskom is broke,” says Ronald Chauke, OUTA’s Portfolio Manager on Energy, who is at the NERSA hearing in Cape Town. “At best, we propose that NERSA should not allow Eskom to exceed CPI, which is around the 5% mark, but instead, Eskom should find savings by reducing the headcount and staff costs, along with returning to lower primary energy costs by undoing the inflated and often corrupt contracts entered into during the Jacob Zuma era.”
The public should not have to pay the price for Eskom’s corruption and poor leadership.
“We are tired of inefficient SOEs believing they are able to pass on their massive operating and debt costs to society, when in fact they should be running their operations as innovative world-class entities,” says Wayne Duvenage, OUTA’s CEO.
“We also cannot accept that the value of Eskom’s Regulatory Asset Base, on which part of these tariff hikes are based, is allowed to be increased by over 700% from last year’s value of approximately R750bn. In fact, we believe that Eskom’s real asset base values should be pegged at no more that R400bn and its reporting of inflated values for its power plants is contrary to prudent financial reporting which is a serious concern.”
OUTA’s presentation to NERSA is here.
OUTA also opposes Eskom’s Regulatory Clearing Account application, the request for a price increase to cover revenue under-recovery during 2017/18. OUTA believes Eskom should not get any increase. OUTA’s presentation to NERSA on this is here.