Eskom trumpets local content in new generators

Both parliament’s energy and public enterprises committees were visited by top officials from Eskom yesterday. Chief commercial officer Dan Marokane spoke of Eskom’s successes in complying with the law, and its aim of job creation.

From the inception of the “new build” projects, the total local content committed by suppliers amounted to R75.2 billion, which was 63 percent of the R121bn aggregated contract value so far, he said.

Local suppliers had contributed greatly to the increase in local content. Pfisterer had invested R25 million in an insulator plant in KwaZulu-Natal. Sulzer South Africa had subcontracted for about R60m to produce 96 pumps for the Medupi and Kusile coal power stations. Some 45 percent of the contract had local content commitments. Babcock Ntuthuko, which supplies power lines, was awarded a R458m five-year contract. According to Engineering News, it is building a 275 kilovolt transmission line over 85km, from the Spencer substation to the Tabor substation in Limpopo, to add extra power supply to the grid.

The contract with Hitachi Power Africa, which has connections to ANC investment arm Chancellor House, was described as “enabling localisation” through the provision of a R38.5bn boiler contract for Kusile and Medupi. Asked by DA MP Erik Marais about the political connections, Marokane said: “Eskom does not have political connections. We have relationships with suppliers, our suppliers have different relationships.”

At the energy committee, Eskom chief financial officer Paul O’Flaherty told Sapa that Eskom was mulling over the wisdom of demanding tariff increases that would make the electricity price fully cost-reflective of its investments in five years. “We have to balance the reality of the economy versus what Eskom needs,” he said.

Price jumps had been 31 percent in 2010 and 16 percent in the past two years, with anything up to 19 percent expected next year. This, presumably, will cover the cost of political as well as power connections.

Empowered

The Bench Marks Foundation, at the launch of its report into social practices in the platinum mining industry, coined a new term describing an ingenious money-making scheme: boardpreneurship.

Much like tenderpreneurs – politically connected individuals who are driven to amass wealth through the government tendering system – boardpreneurs occupy numerous board positions.

The foundation, established by the South African religious community, monitors the social responsibility of corporate South Africa and it has taken issue with the frequent appearance on company boards of individuals who, by their political connections, are historically disadvantaged people who are already empowered.

By certain mining companies attracting the same culprits over and over, the foundation asserts that “the current black economic empowerment model defeats any real broad-based empowerment and is systemically eroding the institutions of democracy in the country.

“Our political situation is being polluted when mining companies curry the favour of politicians. It undermines democracy, frankly speaking, and this is why communities end up protesting because they don’t trust the democratic process,” David van Wyk, the lead researcher for the Bench Marks study, said.

It is tempting to dismiss the foundation’s findings as sensational. Many of the so-called boardpreneurs it identifies are respected for their achievements in business and the acumen they bring to the table.

This past weekend, however, Julius Malema – himself an alleged tenderpreneur – painted for striking Lonmin workers an acrid scenario of transformation, contending that ubuntu has faded. He told workers that politician and businessman Cyril Ramaphosa – a former National Union of Mineworkers trade unionist and current Lonmin board member – thought nothing of bidding R18 million for a buffalo, but he failed to empathise with workers who toil in the belly of the earth and cry for a wage jump from R4 000 to R12 500.

Even in the absurdity of that anecdote lies some stinging logic.

Hotels

It is often quoted that a friend told author Ernest Hemingway: “The rich are different from us.” To which Hemingway replied: “Yes, they have more money.”

The truth of this became obvious when Bernard de Villèle, the general manager of the new St Regis five-star hotel which is due to open in Mauritius shortly, gave a press conference in Cape Town last week.

Mauritius has been badly affected by the euro zone troubles, which have caused a steep drop in the number of tourists from the UK and Europe, making South African visitors particularly welcome. Air Mauritius is increasing the number of flights from Cape Town and Johannesburg to encourage more South Africans to go there.

It has suited many South Africans, who might otherwise have gone to Europe, to holiday in Mauritius instead.

It has been particularly popular this year, with not even the Olympics attracting large numbers of South Africans, reluctant to pay the high air passenger duty charged by the British government.

In view of this it seemed strange that the Starwood group, which has two hotels in South Africa, should have chosen this year to open a St Regis – its top brand aimed at the super rich – in Mauritius. But De Villèle, a former manager of Cape Town’s Mount Nelson Hotel, explained that although people who were merely quite well off were affected by economic downturns, the seriously rich did not allow it to interfere with their holiday plans.

The St Regis brand was founded by a Colonel Astor, who died when the Titanic sank. He wanted it to be the ultimate in understated luxury, to feel like the private home of a very wealthy family and aimed at it being the most expensive hotel in New York. According to De Villèle, it still is.

Edited by Peter DeIonno. With contributions from Donwald Pressly, Asha Speckman and Audrey D’Angelo.