Eskom’s infrastructure is ‘aged’

Eskom says cutting its maintenance budget is out of the question.

Eskom CEO Brian Dames says they have entered into talks with SA’s four biggest coal producers in an effort to contain costs and its knock-on effect on the power price. Picture: Werner Beukes/SAPA

MIDRAND - Eskom on Friday painted a worrying picture of the state of its infrastructure while arguing in favour of its proposed electricity tariff hike.

The comments were made in the closing session of the National Energy Regulator of South Africa's (Nersa) public hearings on the increase, which were held in Midrand.

The power utility wants to see the price go up by 16 percent every year for the next five years.

Eskom's chief financial officer,Paul O'Flaherty, said commentators had argued the power utility could save money on operations, but questioned where those savings were.

"It would mean we would have to reduce our training and development expenditure. We would [also] have to reduce our capital expenditure."

He said cutting the maintenance budget was out of the question.

"It is aged, it doesn't get the opportunity and effectively, our maintenance programme at the moment is whenever the breakdown occurs."

'TALKS TO CONTAIN COAL COSTS UNDERWAY'

Eskom also revealed yesterday that it had entered into talks with South Africa's four biggest coal producers in an effort to contain costs and its knock-on effect on the power price.

Eskom chief executive Brian Dames said he met with the coal producers - Anglo American, BHP Billiton, Exxaro and Xstrata/Glencore - last week.

He said the parastatal provided the companies with detail to consider establishing a pact, with a view to halt the growing cost of coal.

"We have drafted such agreement with them, we have provided to them [and] are waiting for feedback; and hopefully to then sign-on that we work on this jointly over the next five years."

This week, representatives of the poor, workers, the physically challenged, the mine and agricultural sector all unanimously said no to the proposed increase.

Nersa says it will announce its decision on the electricity tariff hike at the end of February.