PARLIAMENT - Eskom executives could not provide MPs with guarantees that there will be no load shedding this winter, but told the parliamentarians on Wednesday that they were trying to fast-track plans to deal with liquidity issues and coal shortages for power generation.
Briefing Parliament's portfolio committee on public enterprises, Thava Govender, Eskom's group executive for generation, said load shedding was caused by a number of factors not always in the power utility's control, including "human issues", plant failures and severe weather.
He acknowledged problems at several power plants, mostly in Mpumalanga, who were experiencing major coal supply problems.
"The coal stockpiles at the stations...they are low. They have coal, but they are not at the levels we require...," said Govender.
The coal supply problems forced the utility to approach National Treasury to deviate from normal procurement processes to acquire coal faster.
"The present board has approved...the coal we need to procure but it does take some time," he said, adding that they were in a better position than in 2008 when power stations only had 12 days of coal stored.
"We are starting to move coal around in the power stations...where we stand now compared to 2012, we stand at 34 days stock at all the power stations."
Willy Majola, Eskom executive for transmission, said since the 2013/14 financial year Eskom has been operating in a constrained financial environment. It prioritised the building of the Medupi and Kusile power stations to bolster power supply, but could not invest in cost-plus coal mines - where it pays an upfront capital investment in exchange for on-spec coal for the duration of its contract with the mining company.
"The cost-plus mines are now struggling to meet contractual tonnages required per month. As result of this we found stock levels...decreasing in those mines...and is made worse by Tegeta going into business rescue."
Tegeta Exploration and Resources, linked to the Gupta family and president Jacob Zuma's son, Duduzane, who are at the centre of state capture allegations, was in business rescue, affecting coal supply to the Arnot, Hendrina and Komati power stations.
Board member Sindi Mabaso-Koyana later told MPs that several companies linked to state capture would not be getting any business from Eskom.
"Any company that has been implicated during the state capture, going forward, we would also like to stay clear of that. The challenge is on the legacy projects that are still ongoing," said Mabaso-Koyana.
"The contracts that are ongoing, we can't just willy-nilly terminate it, but we are seeking legal advice on how we go about this.
Koyana gave MPs an update on the board's ongoing efforts to clean house. It appears the deeper, they did, the more rot is found.
Following the departure of five senior managers "on the face of serious allegations of misconduct", more executives were suspended.
"A further four executives remain on suspension, two of which will be facing independent disciplinary hearings in this month of April, with the remaining two scheduled for the month of May," she said.
In addition, another 239 cases of possible wrongdoing was identified through whistleblowers alone. Of these, 75 investigations were complete. At least 39 people are already facing disciplinary action.
Lifestyle audits of senior managers were also underway, "not just at executive level, two steps below the executive level", said Mabaso-Koyana.
Eskom workers doing business with the entity was also under the microscope as this was against company policy.
"This has always been policy, but however not been applied and monitored, so we are now raising awareness of this...," said Mabaso-Koyana.
"Through an audit process, 24 employees were identified...to be doing business with Eskom. In fact, one employee had a contract of R26 milion for themselves."
She said when the 24 employees were confronted, they "told us that the previous leadership have encouraged them to do business with Eskom".
Eskom executives acknowledged the liquidity challenges as it grapples with lower than expected revenue, with acting chief financial officer Calib Cassim saying: "The next 12 months will be difficult..."
"At some stage, we should be able to come back here and say how we going to make sure income generated is able to service the debt and capital."
Defaulting municipalities also came under the spotlight, with Eskom saying it continued to battle to recover the R13.5 billion in debt owed to it by defaulting municipalities.
Eskom's group executive for customer services, Ayanda Noah, detailed how difficult it was to recover the money, even though Eskom has been threatening power interruptions to municipalities not paying their debt.
She explained how former Eskom chief executive officers had given her instructions not to cut power to municipalities defaulting on its debt to the power utility because it would not go down well with voters.
"If you and I get electricity from Eskom and you consume and you don't pay, we give you 14 days and then we terminate you...," said Noah.
"When it comes to municipalities, we don't do that. What we have found that our credit control tool is ineffective because on some occasions...we've been instructed to stop interrupting [electricity supply]..."
Noah said she was instructed to not cut off electricity to defaulting municipalities ahead of the 2016 local government elections. Last year, she was again instructed that power cuts were out of the question because they were "not politically palatable".
- African News Agency