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Eskom to spend R3.76 billion a year on unsuitable coal

Eskom to spend R3.76 billion a year on unsuitable coal

Mar 9, 2015

The Democratic Alliance’s (DA) Natasha Mazzone, Shadow Minister of Public Enterprises, seems to have her hands full with Eskom today, 9 March 2015, as she issues yet another statement about the power utility. This time, she is responding to reports that suggest Eskom intends securing “5 million tons of unsuitable export-quality coal at a cost of R3.76 billion a year”.

Requesting that Eskom table any possible deal before Parliament, Shadow Minister Mazzone says Eskom must prove to the Portfolio Committee that all other possible avenues to source suitable coal have been exhausted and that this deal is a matter of last resort.

The DA’s media release follows:

Reports indicate the concerning intention by Eskom to secure 5 million tons of unsuitable export-quality coal at a cost of R3.76 billion a year. The coal is unsuitable as it is of too high a grade and would require costly blending down before use in Eskom’s power stations.

I have today written to the Chairperson of the Portfolio Committee on Public Enterprises, Dipuo Letsatsi-Duba, requesting that she summon Eskom management to table any possible deal before Parliament.

Eskom must prove to the Portfolio Committee that all other possible avenues to source suitable coal have been exhausted and that this deal is a matter of last resort. Failing that, this deal should not be entered into and viable, cost effective and long term alternatives must be sourced.

This latest step by Eskom is bewildering when one considers the bailouts announced by government to the tune of R10 billion by June, a further R10 billion in December and another R3 billion next year. Eskom clearly views National Treasury, and by extension the South African public, as bottomless pits of money.

Parliament needs to be afforded the opportunity to interrogate the provisions of any deal and ensure that the money pumped into Eskom by the South African public is used wisely.

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