The view below is from an Eskom engineer (1977 – 2004) (Forced to take
Early Pension due to Affirmative Action)
Eskom (when it was the Electricity Supply Commission) was one of the
best companies in the world.
It was owned by all South Africans, and was a non-profit making
organization. Money was always set aside, by selling electricity for
more than it cost to produce, making profit for replacement and
expansion. (No World bank or Government loans).
In 1994 it was turned into a business with the government as sole
shareholder. This was done to collect further tax from those who
actually pay for electricity, and to provide a vehicle for the
implementation of government policies in the form of job creation and
Profits, and the money set aside for replacement and expansion and
maintenance, was paid to the government as dividends. The sole
‘shareholder’ directly appointed most of the executive, and
These appointments came out of the ranks of the ANC and were people with
no managerial or Power Plant experience.
The people started getting appointed & promoted based on potential.
They couldn’t perform the work but the people who could do the work were
retrenched based on skin colour and were re-employed as contractors.
Although no additional work was getting done (due to lack of funds
because of the increased workforce of roughly 23%) this was fine because
the government wanted to reduce unemployment.
In order to bring relief to poverty stricken townships, Eskom directors
were instructed to produce the cheapest electricity in the world. This
plan did not work, because of all the extra wages, contractors, a
management team that did not have a clue how to run a power plant,
resulted in ESCOM running into huge losses for the first time in history.
To compensate for this, the non-competent management team cut the
maintenance budget by 55% This was the first «crack» in the once stable,
profit making Power giant’s foundation.
The sole shareholder in the Mbeki era wouldn’t allow Eskom to build any
further power stations, saying that this would be done by private
investors. The private investors didn’t come to the party because
electricity was too cheap (remember the reduced fee for the poverty
stricken masses) to provide adequate return on investment.
Five years too late Eskom was allowed to expand and build 2 huge, new
power stations, but it didn’t have any money. This had to be borrowed.
The reason for this was that the ANC government instructed ESCOM NOT to
cut the power to non-paying black townships, resulting in HUGE losses.
(In the 2014-2015 book year, Soweto was R670 million in arrears, with
more the than 5.2 million illegal aliens).
The «New» Black uneducated, with no experience, signed a contract with
the Richards Bay Hillside Smelter to deliver 120 MW of power, for 25
years (Who in his right mind signs a contract for such a long period?)
At a reduced cost of 27% of the real cost of electricity. (120 MW is
enough power to run a city the size of Vereeniging). The ANC, the sole
shareholder, wanted a piece of the cake (the two new power plants) and
‘got’ a big piece of Hitachi — the company who ‘won’ the contract to
supply the boilers for these power stations.
Because of this Eskom wasn’t allowed to take Hitachi to court when poor,
sub grade materials were supplied.
Then Eskom, with its reduced standards, attempted to project manage the
construction of these new power stations by itself.
What a calamity !!!!!
The money was borrowed from the World Bank — however because they are
coal stations a requirement was the installation of flue gas
This hasn’t happened (yet) because of insufficient water. So Eskom (they
don’t mention the ANC Government) is in the s..t with the World Bank.
In short, because of taxation, affirmative action, transformation,
employment, equity, BBBEE, lots and lots of corruption, a bloated and
bureaucratic workforce etc. Eskom has run out of money and generation
capacity, standards have dropped dramatically, corporate memory is being
lost at an alarming rate due to «forced» retrenchments of skilled,
qualified white persons with years of experience.
Today Eskom is attempting to borrow the money for the steam generator
replacement at Koeberg from a French bank.
One of the questions that this bank is asking is about post Fukushima
safety improvement progress.
Guess what !!!!!
Because there is no money ……….
As is always the case, SOMEONE must pay. So Eskom wanted to dramatically
increase its price. The government (who is also the sole shareholder)
wouldn’t allow an increase large enough to cover the cost of its
So Eskom is bankrupt, and, there is no money for maintenance, so the
situation will carry on until total breakdown is the last resort.