climate finance

Over the weekend, OUTA, a South African non-profit organisation, issued a statement applauding a decision taken by the national energy regulator, NERSA, rejecting Eskom’s request for a higher tariff.

However, OUTA said that it disagrees with NERSA’s comment that a 2,2% increase makes Eskom unsustainable as the organisation believes a tariff hike of 2,2% will force the utility to seek internal efficiencies and review its cumbersome and wasteful operational processes.

Ted Blom, OUTA’s energy portfolio director said: “We are appalled that Eskom has sighted 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.”

Blom added: “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.”

Dentons Report on Eskom

Last week, the national power utility finally released the much awaited report compiled by multinational law firm, Dentons.

Commenting on the report, Blom said: “We believe an independent and detailed commission of enquiry - 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.”

He continued: “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.”

The organisation urged Minister Lynn Brown and NERSA to 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 Rands lost to corruption, the statement said.

“Unless Eskom engages meaningfully with its critics, it will continue to suffer massive losses and will dig its own hole deeper,” Blom concluded.