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You be the judge

Posted By Chris Reay, Monday, 25 May 2015

“The president again blamed the scheduled blackouts, in part, on the apartheid regime's failure to expand the electricity supplier's capacity. SA’s electricity woes are a "challenge", but not a crisis and the government knows how to address it”.

We can’t affect the furnaces, but downstream, we have to shut the mills for the times when we are asked to cut back. He explained that the R1.5-million-an-hour loss was calculated based on the closure of Vanderbijlpark’s hot-strip mill and its downstream operations, as well as halting operations at Newcastle from “the rod mill and down”. A CEO statement.

The view below is from an ex-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 power utilities 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 surplus for replacement and expansion (No World bank or Government loans). It created its own sinking fund. 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 black empowerment. Profits, and the money set aside for replacement, expansion and maintenance, was paid to the government as dividends.

The sole 'shareholder' directly appointed most of the executive, and non-executive directors. These appointments came out of the ranks of the ANC, and were people with little managerial or power plant experience. Appointments were often based on nepotism. 

They couldn't do the work, but the people who could do the work were retrenched based on skin colour, and some were then re-employed as contractors. Although no real additional work was getting done, (due to lack of funds because of the increased work force of roughly 23%) this was considered acceptable 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 utility and which resulted in Eskom running into huge losses for the first time in its history. To compensate for this, the incompetent management team cut the maintenance budget by 55%. These were the first “cracks” in the once stable, profit making power giant’s foundation. 

You will have to live with it and decide if “it’s not a crisis and the government knows how to address it”.

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