A couple of weeks ago, Eskom’s contractors suffered an accident at the Ingula pumped storage site in the Drakensberg. Eskom’s knee-jerk reaction was to stop work at all construction sites, while suggesting its contractors only paid lip service to the matter of safety.
Meanwhile, it’s apparent that Eskom has little respect for the safety of the country it serves, as a reliable electricity supply is essential to the safety of millions, apart from being the economy’s lifeblood. It has little respect for the safety of its own employees, as evidenced by the explosive disintegration of the Hendrina generating set while on routine test a few years back. Forget the massive cost of that indiscretion.
This happens in the background of Eskom’s apparent refusal to do anything to mitigate the massive and fraudulent cost of virtually giving away nearly 5 percent of the country’s available power to BHP Billiton’s aluminium smelters. Maybe this attitude has something to do with BHP Billiton being one of the coal suppliers with which Eskom appears incapable of concluding reasonable contracts.
The BHP Billiton issue should be a target for Julius Malema’s Economic Freedom Fighters, taking up the cudgels to obtain electrical power for rural communities at reasonable prices.
Then we learn that the Medupi power station “is on track to deliver power in the second half of 2014”. If memory serves correctly, Medupi’s first unit was scheduled to be delivering power about now.
Eskom’s inability to define a deliverable control scheme and to understand the complexities of welding procedures, together with appalling management of contractors, has put back completion by another year at least. Is this what happens when the chief financial officer acts as the chief project manager?
Whichever way one turns, Eskom exudes incompetence. This is one of the best paid African corporations and which, less than 30 years ago, successfully planned and executed one of the largest power station building programmes in the world. That was in the days when it launched, with serious intent, the Schools Science Expo and when it was creditworthy; today, it still sponsors the expo, without being able to act as an inspiration to it, while its bonds fast approach junk ratings.
This is the corporate entity so badly needed by Africa to provide the lead on the Democratic Republic of Congo’s Grand Inga hydroelectric scheme which could efficiently power up the entire sub-Saharan Africa. Only Eskom had the African competence to lead such a project and, apparently, President Jacob Zuma’s cabinet believes it still has it. Clearly, the Department of Zero Energy also subscribes to that notion while it does nothing to ensure that Eskom performs to its mandate. But then the integrated energy plan takes no account of any possible contribution from Grand Inga which, potentially, could make redundant any consideration, and cost, of new nuclear power stations, or more coal-fired power stations.
Eskom has to be the world’s only major corporate which survives on spending good money to persuade its customers not to consume its product. In 2012, it succeeded in selling less product than in 2009: this proved it had failed in its empty promise to catch up on the backlog of scheduled maintenance, much less to significantly reduce that backlog. And, if less is better, it should be paid accordingly.
One is forced to compare Eskom’s performance with that of Sasol, which has faced similar capital costs and more complex technological challenges over the same 30-odd year period. But Sasol is privately owned and knows how to turn a good profit, even mining its own coal and developing its own technologies. Maybe that is the answer, privatise and make everyone happy.
Roger Toms
Hout Bay
Laws and unions are source of problems
We have just received the third quarterly annual review showing that the employment situation is improving, ever so slightly. The improvement of 1 percent is at least showing that there has been a turn. Over and above this, we also note that some of these improvements are in the manufacturing sector. This is good news all round.
Far be it for labour commentators to be positive nowadays, but it needs to be said that the business community, civil society and even the government (in certain respects) have now at least identified that labour legislation and the behaviour of the trade unions have led to some of our economic failings.
The furore caused by BMW when it turned down the bid to manufacture a new car has been heard far and wide. Simon Susman of Woolworths, Christo Wiese of Pepkor and Chris Griffith of Anglo American Platinum have all been shouting from the rooftops about the labour situation. This loud shout from the business community was almost drowned out by Finance Minister Pravin Gordhan and his deputy, Nhlanhla Nene.
The government has at last seen fit to tackle Cosatu and some of its more ridiculous policies. Thankfully, civil society, in the form of many organisations, including the FW de Klerk Foundation and the Free Market Foundation, have flexed their muscles. Both these foundations have embarked on successful labour litigation with a view to improving our economy.
Opposition in Parliament is getting louder, and not a day goes by when the opposition parties don’t raise the issue of labour legislation and the negativity of the trade union movement.
One needs to couple the voice of business, civil society and political parties with some of the more interesting developments in the trade union movement. Solidarity is a force to be reckoned with and has successfully challenged some of the negative legislation. Even the Association of Mineworkers and Construction Union, probably one of the most radical unions, has not unilaterally embarked on a strike in the gold mining industry, but has chosen to withhold its 48 hour notice to strike.
The popular press has given a lot of coverage to the negative behaviour of Cosatu, and the negative consequences of some of our labour legislation. With all this noise, one cannot help but think that maybe we have eventually recognised the problem, and now we can embark upon trying to solve it, now that we know what it is .
Clearly, certain legislation, which is the youth wage subsidy (which has been supported by the DA throughout) and the National Development Plan (which has been attacked by Cosatu and the SA Communist Party) will go some way to getting us back onto a path of full employment.
Michael Bagraim
cape Town
Numsa chief tells truth about BMW blackmail
In the article written in your paper on November 7 (“Numsa president gets economical with the truth”), it is alleged that I, Cedric Sabelo Gina, was economical with the truth on the role that was played by the South African media on covering the BMW decision on South Africa losing a model because of strikes in the country versus the announcement by Mercedes-Benz of its major injection into the economy.
The matter I was truthfully raising is that in reporting about the BMW decision, the media attempted to create a wedge between society and the National Union of Metalworkers of SA (Numsa). How they attempted to do this was by presenting Numsa as responsible for BMW taking its decision without contrasting a fact that Mercedes-Benz, also a German multinational, has recommitted confidence in the South African economy when it was part of the companies that had their workers participating in a three-week strike.
In my book, there is nothing economical with the truth, in pointing out that it was not a mistake on the part of the media to perpetuate the lie that unions in South Africa are a hindrance to foreign direct investments in our economy.
For us, the conclusion we have made as a union that BMW was blackmailing all of us, the union and the country that supports the auto sector with millions of rands, rang even truer when Mercedes-Benz made its recommitment to the South African economy.
Thanks for the opportunity that was granted to Numsa in Business Report’s Twitter Town Hall meeting. I hope this clarifies the misunderstanding that has caused this serious allegation against me; that I am a liar, albeit in a tone that is disarming but still venomous.
Cedric Gina
Numsa president
Imminent chicken toll a strong possibility
By now, readers who have an interest in the matter would be fully aware of the new application by the South African poultry industry for an anti-dumping ruling against bone-in chicken portions imported from Germany, the UK and the Netherlands.The media,including yourselves, aired the issue a few times last week.
This is another attempt by an increasingly desperate industry to punish South African consumers for its own business woes caused predominantly by its own failings of adhering rigidly to a faulty business plan.
Their fragile plan is based on massive production and sales of individually quick frozen chicken (IQF) drowning in injected water – sometimes as much as 43 percent of the chicken is water.
These unsightly botoxed products have been used for many years by an industry devoid of any realistic plans based on overcoming its own self-created woes,or meaningfully addressing the real economic challenges facing most industries and businesses in this country today.
When duties on non-EU imports were raised a little over a month ago, we clearly stated, despite scoffing from the very same applicants, that the consumer was being expected to finance industry inefficiencies. The proof of the pudding is in the eating and increased local chicken prices are already on some supermarket shelves.
We can confidently predict that if this latest attempt to obtain assistance from an arm of government that has very clear protectionist leanings, then the consumer, especially the poorer consumer, will be facing the food industry’s equivalent of e-tolls.
We caution South Africans – be aware of the strong possibility of imminent c-tolls.
David Wolpert
Chief executive, Association of Meat Importers and Exporters of SA