Outa commends Nersa for rejecting Eskom’s demands for higher tariff increase

The Organisation Undoing Tax Abuse (Outa) on Sunday lauded the National Energy Regulator of South Africa (Nersa) for rejecting Eskom’s demands for a higher tariff increase and for sticking to the 2.2 percent allowed under the current multi-year price determination (MYPD) process, saying Outa has it on “good authority” that Eskom’s lack of robust internal auditing processes has given rise to billions of rand lost to corruption.

“We are appalled that Eskom has cited current ‘hardships’ as the reason for requesting a much higher increase, especially since these so-called hardships are self-inflicted and exist due to poor leadership – as reflected in the recent Dentons Report,” Outa energy portfolio director Ted Blom said.

Outa did, however, disagree with Nersa’s comment that a 2.2 percent increase made Eskom unsustainable, as Outa believed a tariff hike of 2.2 percent would force Eskom to seek internal efficiencies and review its cumbersome and wasteful operational processes.

“Eskom’s leadership must change its mindset and realise that it cannot continue to pass its poor productivity, maladministration, expensive contracts, and billions lost to corruption onto the public through tariff hikes,” Blom said.

The damning evidence contained in the “sanitised” Dentons Report released last week confirmed that Eskom’s leadership had not deserved a cent of the bonuses received in recent years.

“We believe an independent and detailed commission of inquiry, as has been requested several times over the past 10 years, is long overdue, and will reveal damning evidence of looting, organised crime, and institutionalised fraud within Eskom. Unless comprehensive action is taken to stop the rot and apprehend the perpetrators within and outside of Eskom it will not be able to fulfil its role as the nation’s electricity provider,” he said.

The under-recovery of poorly planned and over-zealous revenue targets should not become the consumers’ problem. The people of South Africa were not Eskom’s “piggy-bank” to tap into each time Eskom got its forecasts and overspending wrong. Public Enterprises Minister Lynn Brown and Nersa should stand firm in forcing Eskom to get its house in order and cease the repetitive waste and poor leadership mistakes.

“Outa has it on good authority that Eskom’s lack of robust internal auditing processes has given rise to billions of rand lost to corruption. Unless Eskom engages meaningfully with its critics it will continue to suffer massive losses and will dig its own hole deeper,” Blom said.

According to media reports, the long-awaited Dentons Report on Eskom sheds light on shocking financial abuses at Eskom. News24 obtained a redacted copy of the report, which was commissioned by the Eskom board in 2015, through a Promotion of Access to Information Act (PAIA) application.

Dentons, the law firm appointed to conduct an audit into “the status of the business and challenges experienced by Eskom”, identified serious cause for concern regarding the manner in which Eskom awarded contracts for the supply of diesel and coal, among other shortcomings, it said.

– African News Agency (ANA)

For more news your way, follow The Citizen on Facebook and Twitter.