ELECTRICITY
BRIAN KANTOR: Breaking up Eskom can benefit economy and the taxpayers
"The economy stands to benefit from a much more competitive market for energy from additional generators and distributors of electricity"
The owners of Eskom (all South Africans) should be aware of the grave risks their managers and directors have taken on their behalf. The risks, that is, to the value of the many billions of rand that have been deployed on their behalf to add to Eskom’s capacity. The new Medupi power station was originally estimated to cost R69.1bn in April 2007. The latest estimate puts the figure at more than R135bn and still rising. Kusile was estimated to cost R80bn. The revised estimate in July 2016 was R160bn – and will be revised still higher. The danger is that all this additional capacity may be worth much less than it cost, and that Eskom will not be capable of servicing and repaying the additional R300bn-plus debt that has been incurred to fund these developments, much of it guaranteed by the taxpayer. The further danger is that the burden of these overruns and servicing the debt will be passed on to the consumers of electricity in SA through further increases in Eskom’s tariffs. But Eskom...
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