Gupta-linked Tegeta blamed for shortage of coal at Eskom. File Photo: IOL
Gupta-linked Tegeta blamed for shortage of coal at Eskom. File Photo: IOL

Eskom blames Guptas for coal shortage

By Luyolo Mkentane Time of article published Sep 18, 2018

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JOHANNESBURG – The fallout from the Gupta-linked Tegeta Exploration and Resources has come back to bite the country's already falling economy with Eskom yesterday blaming the family for coal shortages at its power stations.

The power utility said yesterday that its coal reserves were currently sitting at 10 days against the 21 days of stockpiles as recommended by the National Energy Regulator of South Africa (Nersa).

Eskom spokesperson Khulu Phasiwe said at least eight of Eskom’s power stations - including Arnot, Hendrina, Kriel and Tutuka - were currently on less than 10 days of coal supplies against Nersa's stipulation of 21 coal stockpiles to prevent possible blackouts.

Phasiwe said Eskom had already informed Nersa about the shortages and that new coal contracts would be signed soon to rebuild the coal stockpiles at the affected stations.

In 2008, Nersa said 23 days of power cuts cost the economy an estimated R50bn.

Yesterday, analysts warned that the shortages would put more pressure on an economy that was already in recession.

Heavily dependent

Institute of Race Relations chief economist Ian Cruickshanks said the economy was heavily dependent on continuous and uninterrupted power supply from Eskom, which enjoys a monopoly.

He said Eskom was putting President Cyril Ramaphosa’s $100 billion investment drive at major risk.

“The risk is that we are going to have load shedding and this will disrupt battling sectors like mining and manufacturing. We won't get foreign investment if we can't even guarantee investors they will have reliable power,” Cruickshanks said.

Energy analyst Ted Blom said that Eskom was warned as early as 2007 that it could face a coal cliff.

“Now, more than 10 years after the announcement, not a single new Eskom-tied coal mine has been opened,” said Blom.

Blom said Eskom, which recently received a R33billion loan from China after posting a net loss of R2.3bn and irregular expenditure of R19bn in 2018, was plainly in a state of deterioration.

Dr Kelvin Kemm, a nuclear energy expert, said economic advancement and GDP growth the world over was linked to electricity consumption.

“We absolutely have to fix our coal supply problem, otherwise the economy will be severely damaged,” said Kemm.

“Unlike coal, nuclear could be stockpiled for years to come in one shot. You can't do that in coal. We need nuclear power to balance the heavy reliance on coal.”

Investec chief economist Brian Kantor said the impact of load shedding on the economy would be terrible. “Businesses rely on electricity supply and they (Eskom) are not up to the task.”


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