Debate In The National Assembly
Ms Sj Nkomo, Mp
Today we as the IFP, together with all other parties of this National Assembly, stand at this podium once again to provide our energy supplier, ESKOM, with yet another bail-out!
We have no choice in the matter but to approve the Bill, it is either provide the 23bn or ESKOM will spiral further downwards into a greater liquidity crisis and ultimately, bankruptcy.
The long and chequered history of ESKOM failures, incompetencies and mismanagement coupled together with government approved preferential below-cost electricity tariffs, especially for energy intensive industry, which are we told consume about 70% of our energy supply, have brought us to the present state of near collapse and must become a relic of an unfortunate past.
We are advised that Eskom is currently only able to supply approximately 79% of its total supply which includes making use of the very expensive OCGT diesel turbines which cost around R3 per kilowatt hour. It sells this electricity for 73c per kilowatt hour. This is clearly not sustainable.
Energy intensive industry should immediately be paying a fair price for the energy they use to generate profit, which as stated before is the bulk of current energy supply.
A strong signal must therefore be sent to this industry that South Africa will no longer offer the effective subsidy resulting from below-cost-reflective tariffs, and should in fact be recovering past subsidization costs from such industry, who have long since transformed such subsidy into private profits.
It is also imperative that going forward, and once the economy is able, NERSA set cost-reflective tariffs, whilst ensuring the protection of the ordinary household consumer from astronomical tariff hikes.
In addition, this government and Eskom must provide a transparent accounting and reporting system to the ordinary taxpayer whose money is being utilized to finance this bail out. Consumers must also be consulted and their inputs obtained regarding load shedding schedules.
Our tax payer deserves nothing less!
In respect of short and long terms solutions to our energy crisis we call for greater investment and partnerships with IPP’s. We note recent statistics which indicate that the cost per kilowatt-hour (kWh) of solar- and wind-generated electricity produced by independent power producers has decreased steadily of the last few years, and that such energy stations are now cheaper than coal and gas new-build options. We expect these costs to drop even further in the future as technology, especially Solar (photovoltaic) electricity, becomes further advanced.
Skills flight, the current high level of importation of skills and corresponding lack of skilled engineers in this country must also be addressed. Why is it that our engineering students at tertiary institutes have such a high failure and drop-out rate? We must address this issue at basic and secondary school level, and particularly in terms of the subjects of mathematics and physical science, in which these students seem to be struggling.
In conclusion, we support this appropriation because as stated before we have no other real option, its “hobsons” choice. Our faith in Eskom remains circumspect at best until proven otherwise.
We trust that Eskom, under its new management will not fail the people of South Africa again.
I thank you.
Contact: Hon SJ Nkomo, MP, on 076 553