Business and Technology

De Ruyter says Eskom doesn’t deserve taxpayer money

Eskom can’t rely on government bailouts forever, but the National Energy Regulator of South Africa (Nersa) must also come to the party and allow the power utility to increase prices to match the cost of producing power. This is the view of Eskom CEO André de Ruyter in an interview with Professor Anton Eberhard, director of the Power Futures Lab at the University of Cape Town’s Graduate School of Business.

We are well aware that we are not entitled to a cent of taxpayers’ money,” De Ruyter said in response to a question about the R220 billion in government bailouts Eskom has received since 2008. That is why Eskom has embarked on the reforms and corporate savings so it can achieve operational and financial stability in a short space of time,” he said.

“That is the reason we have aggressively tackled procurement corruption, operational inefficiencies and cost-cutting across the board through prudent management of resources and a reduction in headcount. These we can do internally, they are within Eskom’s scope of activity. De Ruyter said that for Eskom to stop relying on government bailouts, Nersa must allow the power utility to increase electricity tariffs that reflect the cost of producing the power.

“Even with a 20% annual increase in the tariff, the reality is that Eskom prices will still be at the bottom third of comparable international electricity prices,” he said. This does not make too much sense, particularly for our export sector, which consumes electricity to produce commodities priced in US dollars, and compete with companies who pay in US dollars for their electricity input.

In addition to the need for cost-reflective tariffs, De Ruyter said they also need to address the thorny issue of nonpayment for electricity by defaulting municipalities, particularly in the Free State.

Source: mybroadband

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