ESKOM and the National Union of Metalworkers of South Africa (Numsa) have been granted the right to intervene in the Competition Tribunal’s hearings next week on the merger of the world’s largest commodity trader, Glencore, and mining group Xstrata.
Eskom has proposed that the tribunal impose conditions on the merger that could include measures such as ensuring the ratio of exports to domestic coal supply be kept constant after the merger, and that the merging parties agree to negotiate in good faith on long-term coal-supply contracts as these expire.
The utility says it does not want to stand in the way of the merger, but has to raise its concern about the future supply of coal for the domestic market.
Public hearings on the merger start on Monday.
The company says it has a public mandate to supply electricity to the entire country and is dependent on the right grade of coal at the appropriate time and at an affordable price to be able to deliver on its mandate.
In the absence of industrial policy that provides for the security of domestic supply before exports, the merger highlights Eskom’s vulnerability.
Eskom spokeswoman Hilary Joffe says: “The merged entity would account for approximately 15% of Eskom’s coal supply, with Glencore and Xstrata accounting for the bulk of the supply to the Majuba and Hendrina power stations and supplying smaller quantities to Duvha, Komati, Arnot and Matla power stations.”
Although it has secured the majority of its supply needs until 2018, Ms Joffe says Eskom needs to raise its concern about supply security beyond that.
Eskom indicated that it would propose additional conditions if necessary.
Xstrata is the world’s largest exporter of the type of coal used by power stations, and all of its mines and plants are in South Africa.
Glencore holds almost 34% of Xstrata and after this transaction — valued at $80bn — is approved, the miner will become a wholly owned subsidiary of Glencore.
It currently produces 27.4-million tons of saleable coal a year in South Africa, of which almost 30% is exported.
Source: Business Day
Showing posts with label Eskom. Show all posts
Showing posts with label Eskom. Show all posts
Friday, December 7, 2012
Thursday, February 9, 2012
Zuma unleashes SIU on fraud, corruption at Eskom
Over the next three years, the Special Investigating Unit (SIU) will investigate Eskom's operations for evidence of corruption, fraud or maladministration, by proclamation of the presidency. Key areas of focus identified by the SIU's initial assessment are Eskom's coal procurement and transport services, as well as undisclosed interests held in companies doing business with the parastatal.
The intervention is being made at Eskom's request. "Eskom came to us -- they took the initiative and requested the intervention," said SIU spokesperson Marika Muller. According to Muller, Eskom is the first state-owned enterprise to request such an intervention. While not unheard of -- government departments have in the past made similar requests -- the request is not common.
The proclamation was authorised on Tuesday. It empowers the SIU to use a range of special powers, including ordering people to cooperate with its investigations by producing specific evidence or appearing before the SIU to answer questions under oath. A team of SIU investigators will work with Eskom's in-house forensic team to conduct a systematic check of all Eskom divisions. Any criminality uncovered will be referred to the National Prosecuting Authority and the South African Police Service.
After making its initial assessment, and in line with the legislation that governs the way the SIU operates, the unit reported back to the justice ministry and president and recommended that the president authorise a proclamation that would allow it to proceed with a full investigation.
Eskom announced its partnership with the SIU in March last year. At the time, Eskom's chief executive, Brian Dames, said: "We have made it a strategic imperative that Eskom must be a high-performance organisation. Our partnership with the SIU will help us to achieve that." Dames said the move was part of a drive towards greater efficiency and transparency, and that the initiative was in line with Eskom's commitment to stamping out corruption and strengthening governance. He said appropriate action, including criminal prosecution, would be taken should corrupt activities be uncovered.
Chris Yelland, managing director of industry publications company EE Publishers, endorsed the move. "The bottom line is that Eskom can't lose by going into this," he said. "They're taking a proactive stance against corruption even if it is within their own ranks. If something suspicious is found, they'll deal with it which is exactly what the public wants to hear."
In recent years Eskom has suffered an onslaught of setbacks including
* a power crisis and a series of rolling blackouts;
* a breakdown in trust between its board, former chairperson Bobby Godsell and former CEO Jacob Maroga;
* a poor relationship with the media and the public;
* allegations that its coal procurement processes were in shambles and its coal division in a near state of collapse;
* a conflict of interest in a multibillion-rand tender deal involving the ANC's investment arm Chancellor House;
* a major accident at the Duvha power plant which threatened the power supply.
The parastatal has seen something of a turnaround since Dames took over as CEO in mid-2010 and although questions still remain about Eskom's ability to keep the lights burning, there has been during his tenure a greater emphasis on communicating regularly with the public.
Source: Mail & Guardian
The intervention is being made at Eskom's request. "Eskom came to us -- they took the initiative and requested the intervention," said SIU spokesperson Marika Muller. According to Muller, Eskom is the first state-owned enterprise to request such an intervention. While not unheard of -- government departments have in the past made similar requests -- the request is not common.
The proclamation was authorised on Tuesday. It empowers the SIU to use a range of special powers, including ordering people to cooperate with its investigations by producing specific evidence or appearing before the SIU to answer questions under oath. A team of SIU investigators will work with Eskom's in-house forensic team to conduct a systematic check of all Eskom divisions. Any criminality uncovered will be referred to the National Prosecuting Authority and the South African Police Service.
After making its initial assessment, and in line with the legislation that governs the way the SIU operates, the unit reported back to the justice ministry and president and recommended that the president authorise a proclamation that would allow it to proceed with a full investigation.
Eskom announced its partnership with the SIU in March last year. At the time, Eskom's chief executive, Brian Dames, said: "We have made it a strategic imperative that Eskom must be a high-performance organisation. Our partnership with the SIU will help us to achieve that." Dames said the move was part of a drive towards greater efficiency and transparency, and that the initiative was in line with Eskom's commitment to stamping out corruption and strengthening governance. He said appropriate action, including criminal prosecution, would be taken should corrupt activities be uncovered.
Chris Yelland, managing director of industry publications company EE Publishers, endorsed the move. "The bottom line is that Eskom can't lose by going into this," he said. "They're taking a proactive stance against corruption even if it is within their own ranks. If something suspicious is found, they'll deal with it which is exactly what the public wants to hear."
In recent years Eskom has suffered an onslaught of setbacks including
* a power crisis and a series of rolling blackouts;
* a breakdown in trust between its board, former chairperson Bobby Godsell and former CEO Jacob Maroga;
* a poor relationship with the media and the public;
* allegations that its coal procurement processes were in shambles and its coal division in a near state of collapse;
* a conflict of interest in a multibillion-rand tender deal involving the ANC's investment arm Chancellor House;
* a major accident at the Duvha power plant which threatened the power supply.
The parastatal has seen something of a turnaround since Dames took over as CEO in mid-2010 and although questions still remain about Eskom's ability to keep the lights burning, there has been during his tenure a greater emphasis on communicating regularly with the public.
Source: Mail & Guardian
Monday, December 13, 2010
Maroga's version 'just not true', says court
Eskom's disgraced former CEO Jacob Maroga was left without a leg to stand on when Judge Thokozile Masipa ruled against him in the R85-million lawsuit that he had brought against the power utility for unlawful dismissal.
The Mail & Guardian has chronicled Maroga's messy history with Eskom in the past in a dummy's guide to the Eskom crisis. This year, Maroga's battle for reinstatement only intensified. On January 23 the Sunday Times reported that Maroga had filed a civil claim against Eskom, its acting CEO and chairperson Mpho Makwana, as well as then Minister of Public Enterprises Barbara Hogan.
He asked that he either be reinstated as CEO of Eskom or that he be paid R85-million in compensation for being dismissed. He also accused Hogan of acting unethically and of colluding with the Eskom board by saying that he had resigned. Maroga's decision to file the lawsuit was widely slated by political parties and trade unions alike. Shortly thereafter, Eskom announced that it intended to contest the lawsuit.
In May, Maroga filed an urgent interdict to prevent Eskom from appointing a new CEO, but Judge Moroa Tsoka of the South Gauteng High Court set aside the application. Then in early June, lawyers for either side presented their cases at the South Gauteng High Court. Eskom maintained that Maroga had offered to resign and that the board had accepted his resignation, while Maroga argued that he had never offered to resign and that, even if he did, it had been "conditional".
Hogan's lawyers also said she had not been present at the meeting at which Maroga had offered to resign and had also not been involved when the board decided to accept his resignation. Two days later, on June 9, Judge Thokozile Masipa reserved judgement in the case. Meanwhile, on June 15, the power utility announced that it had appointed Eskom veteran Brian Dames as new CEO.
On December 11, after almost a year of legal wrangling, Maroga lost his claim for unfair dismissal and was ordered by Judge Masipa to pay the costs of the trial. Masipa was scathing of Maroga in her judgement, saying "it was argued on behalf of the respondents that Mr Maroga's version taken as a whole on affidavits was so contradictory, unreliable and so demonstrably lacking in credence that it should be rejected out of hand on affidavits. I agree. His version that it is Eskom's version that he resigned conditionally is just not true".
The case hinged on whether Maroga had indeed offered to resign on the night of October 28. Both parties agreed that Maroga, and Eskom chairperson Bobby Godsell had both recused themselves from a meeting of the board. Maroga maintained that this recusal was necessary to allow the board to deliberate on the roles of the CEO and chairperson. However, according to Eskom, both Maroga and Godsell had offered to resign and the recusal was to allow the board to decide whose offer to accept and whose to reject.
After it had made its decision, the board sent two directors to convey its decision to the pair and to accept Maroga's "generous offer" of resignation. However, Maroga said that the board had misunderstood its mandate and that during the conversation with the directors, he had no idea what "generous offer" they were referring to as no mention of the word "resignation" was made. Maroga claimed that he had "reflected" on the matter overnight before trying to correct the misunderstanding the next day.
On this matter, Masipa said it was strange that Maroga did not explain how and when he became aware that the "generous offer" the directors spoke of was an alleged offer to resign. She also questioned why Maroga, instead of asking for an immediate clarification, required an overnight reflection on the matter. "The court can safely conclude that Mr Maroga's version is a fabrication," she said. Furthermore, she pointed out, he also agreed to produce a media statement to announce his resignation and to meet with Godsell and the Human Resources and Remuneration Committee the next day to discuss the implementation of his resignation. "This, in my view, is what seals his fate," she concluded.
Instead of an R85-million windfall, Maroga will be left with a hefty bill to pay. The costs he was ordered to pay include the costs of the employment of five counsel.
Source: Mail & Guardian
The Mail & Guardian has chronicled Maroga's messy history with Eskom in the past in a dummy's guide to the Eskom crisis. This year, Maroga's battle for reinstatement only intensified. On January 23 the Sunday Times reported that Maroga had filed a civil claim against Eskom, its acting CEO and chairperson Mpho Makwana, as well as then Minister of Public Enterprises Barbara Hogan.
He asked that he either be reinstated as CEO of Eskom or that he be paid R85-million in compensation for being dismissed. He also accused Hogan of acting unethically and of colluding with the Eskom board by saying that he had resigned. Maroga's decision to file the lawsuit was widely slated by political parties and trade unions alike. Shortly thereafter, Eskom announced that it intended to contest the lawsuit.
In May, Maroga filed an urgent interdict to prevent Eskom from appointing a new CEO, but Judge Moroa Tsoka of the South Gauteng High Court set aside the application. Then in early June, lawyers for either side presented their cases at the South Gauteng High Court. Eskom maintained that Maroga had offered to resign and that the board had accepted his resignation, while Maroga argued that he had never offered to resign and that, even if he did, it had been "conditional".
Hogan's lawyers also said she had not been present at the meeting at which Maroga had offered to resign and had also not been involved when the board decided to accept his resignation. Two days later, on June 9, Judge Thokozile Masipa reserved judgement in the case. Meanwhile, on June 15, the power utility announced that it had appointed Eskom veteran Brian Dames as new CEO.
On December 11, after almost a year of legal wrangling, Maroga lost his claim for unfair dismissal and was ordered by Judge Masipa to pay the costs of the trial. Masipa was scathing of Maroga in her judgement, saying "it was argued on behalf of the respondents that Mr Maroga's version taken as a whole on affidavits was so contradictory, unreliable and so demonstrably lacking in credence that it should be rejected out of hand on affidavits. I agree. His version that it is Eskom's version that he resigned conditionally is just not true".
The case hinged on whether Maroga had indeed offered to resign on the night of October 28. Both parties agreed that Maroga, and Eskom chairperson Bobby Godsell had both recused themselves from a meeting of the board. Maroga maintained that this recusal was necessary to allow the board to deliberate on the roles of the CEO and chairperson. However, according to Eskom, both Maroga and Godsell had offered to resign and the recusal was to allow the board to decide whose offer to accept and whose to reject.
After it had made its decision, the board sent two directors to convey its decision to the pair and to accept Maroga's "generous offer" of resignation. However, Maroga said that the board had misunderstood its mandate and that during the conversation with the directors, he had no idea what "generous offer" they were referring to as no mention of the word "resignation" was made. Maroga claimed that he had "reflected" on the matter overnight before trying to correct the misunderstanding the next day.
On this matter, Masipa said it was strange that Maroga did not explain how and when he became aware that the "generous offer" the directors spoke of was an alleged offer to resign. She also questioned why Maroga, instead of asking for an immediate clarification, required an overnight reflection on the matter. "The court can safely conclude that Mr Maroga's version is a fabrication," she said. Furthermore, she pointed out, he also agreed to produce a media statement to announce his resignation and to meet with Godsell and the Human Resources and Remuneration Committee the next day to discuss the implementation of his resignation. "This, in my view, is what seals his fate," she concluded.
Instead of an R85-million windfall, Maroga will be left with a hefty bill to pay. The costs he was ordered to pay include the costs of the employment of five counsel.
Source: Mail & Guardian
Thursday, April 1, 2010
South Africa is becoming a high-carbon zone to attract foreign investment
With its proposed Medupi power station, South Africa is an industrialised global climate player and major polluter. With its sky-high poverty levels and average life expectancy of just 51 years, South Africa is not a country we generally associate with extravagant binge-flying lifestyles, turbo-consumerism, and shopping trips to New York. How bizarre then that per capita carbon emissions in South Africa are now higher than in many European countries. While most South Africans are unlikely to ever own a plasma screen TV or Hummer, their carbon footprints still appear to be only slightly less than your average Japanese, and their national carbon emissions are now greater than those of France.
The situation becomes more comprehensible when you look at South Africa's industrial base, with 60% of South Africa's electricity being guzzled by heavy industry, and most of that comes from dirty coal. Now this key global climate player wants another coal station that would pollute as much as the two dirtiest plants in Britain put together, and cause a further surge in its national emissions – and they want you to pay for it. Far from benefiting ordinary South Africans, they will also be forced into subsidising this artificially low-cost electricity, for the benefit of multinational mining companies. It's no wonder that African civil society movements are leading the opposition to this development.
South Africa's situation is a case study in one of the major political currents that poisoned last year's UN climate talks. At Copenhagen, major emerging economies hid behind their poor to justify why they shouldn't need to take on legally-binding climate targets. Infuriating western governments, they used a rigid interpretation of the wonky principle known in UN-speak as "common but differentiated responsibility" (CBDR) to argue for more "pollution rights", since they have less historical responsibility for causing the carbon problem and less ability to pay to solve it. Never mind the new carbon-constrained realities on the whole world, these powerful developing countries claimed the right to pollute indefinitely, because (just like their industrialised counterparts), they saw short-term strategic interest in securing the largest possible area of global atmospheric territory. In short, a concept developed to promote equity has turned into an excuse to allow ever increasing carbon dioxide concentrations in the atmosphere.
Just as Switzerland offers the super-rich the ability to avoid high taxes, and Uzbekistan-presented high-street clothes chains in Europe with cheap child labour in their cotton fields, South Africa and other major emerging economies like China are beginning to exploit the CBDR principle to establish themselves as global havens for the most environmentally destructive industries on Earth. South Africa is effectively setting up shop as a high-carbon economic zone to encourage in foreign companies by freeing them of carbon regulation.
After Copenhagen, the attitude of the most powerful industrialising countries caused much spluttering on the part of western ministers. Ed Miliband was enraged at what he saw as an unfair apportioning of the blame to the industrialised world after the managed collapse of the negotiations, and wrote: "The vast majority of countries, developed and developing, believe that we will only construct a lasting accord that protects the planet if all countries' commitments or actions are legally binding. But some leading developing countries currently refuse to countenance this."
That's why it's so odd that western governments, including our own, now seem determined to egg them on by making a $3.7bn (£2.4bn) World Bank loan to the South African state-owned power company Eskom to help build one of the most polluting power stations in the world. With one hand the government complains about major emerging economies not doing enough to embrace low-carbon development, while at the same time, it directs money that's meant for aid, into dirty coal developments that power the international mining industry.
In fairness, Miliband's comments were clearly directed at China. There was a time last year when climate progressives in the South African government seemed to be his most effective allies in the south. By establishing a reasonable 2020 climate target the South African government positioned themselves in Copenhagen as a bridge between the developed and developing worlds. But in retrospect, with an aspiration to get up to 95% of their electricity from coal by 2025, despite vast untapped clean energy potential, last year's rhetoric looks like a very thin green veneer. Well, either that or the South African government's principled stand has since been quashed by Big Carbon lobbying.
Recognising that a tonne of CO2 from a South African coal plant is just as damaging as a tonne from anywhere else, the White House has signalled they won't offer their support to subsidise the Eksom mega-coal plant in South Africa when it comes up for a vote at the World Bank next week. Yet as the single biggest donor to the Bank, it will be the UK which is likely to get the final say. This offers a key test of whether the climate progressives in our own government can win out.
Source: The Guardian
The situation becomes more comprehensible when you look at South Africa's industrial base, with 60% of South Africa's electricity being guzzled by heavy industry, and most of that comes from dirty coal. Now this key global climate player wants another coal station that would pollute as much as the two dirtiest plants in Britain put together, and cause a further surge in its national emissions – and they want you to pay for it. Far from benefiting ordinary South Africans, they will also be forced into subsidising this artificially low-cost electricity, for the benefit of multinational mining companies. It's no wonder that African civil society movements are leading the opposition to this development.
South Africa's situation is a case study in one of the major political currents that poisoned last year's UN climate talks. At Copenhagen, major emerging economies hid behind their poor to justify why they shouldn't need to take on legally-binding climate targets. Infuriating western governments, they used a rigid interpretation of the wonky principle known in UN-speak as "common but differentiated responsibility" (CBDR) to argue for more "pollution rights", since they have less historical responsibility for causing the carbon problem and less ability to pay to solve it. Never mind the new carbon-constrained realities on the whole world, these powerful developing countries claimed the right to pollute indefinitely, because (just like their industrialised counterparts), they saw short-term strategic interest in securing the largest possible area of global atmospheric territory. In short, a concept developed to promote equity has turned into an excuse to allow ever increasing carbon dioxide concentrations in the atmosphere.
Just as Switzerland offers the super-rich the ability to avoid high taxes, and Uzbekistan-presented high-street clothes chains in Europe with cheap child labour in their cotton fields, South Africa and other major emerging economies like China are beginning to exploit the CBDR principle to establish themselves as global havens for the most environmentally destructive industries on Earth. South Africa is effectively setting up shop as a high-carbon economic zone to encourage in foreign companies by freeing them of carbon regulation.
After Copenhagen, the attitude of the most powerful industrialising countries caused much spluttering on the part of western ministers. Ed Miliband was enraged at what he saw as an unfair apportioning of the blame to the industrialised world after the managed collapse of the negotiations, and wrote: "The vast majority of countries, developed and developing, believe that we will only construct a lasting accord that protects the planet if all countries' commitments or actions are legally binding. But some leading developing countries currently refuse to countenance this."
That's why it's so odd that western governments, including our own, now seem determined to egg them on by making a $3.7bn (£2.4bn) World Bank loan to the South African state-owned power company Eskom to help build one of the most polluting power stations in the world. With one hand the government complains about major emerging economies not doing enough to embrace low-carbon development, while at the same time, it directs money that's meant for aid, into dirty coal developments that power the international mining industry.
In fairness, Miliband's comments were clearly directed at China. There was a time last year when climate progressives in the South African government seemed to be his most effective allies in the south. By establishing a reasonable 2020 climate target the South African government positioned themselves in Copenhagen as a bridge between the developed and developing worlds. But in retrospect, with an aspiration to get up to 95% of their electricity from coal by 2025, despite vast untapped clean energy potential, last year's rhetoric looks like a very thin green veneer. Well, either that or the South African government's principled stand has since been quashed by Big Carbon lobbying.
Recognising that a tonne of CO2 from a South African coal plant is just as damaging as a tonne from anywhere else, the White House has signalled they won't offer their support to subsidise the Eksom mega-coal plant in South Africa when it comes up for a vote at the World Bank next week. Yet as the single biggest donor to the Bank, it will be the UK which is likely to get the final say. This offers a key test of whether the climate progressives in our own government can win out.
Source: The Guardian
South Africa is becoming a high-carbon zone to attract foreign investment
With its proposed Medupi power station, South Africa is an industrialised global climate player and major polluter. With its sky-high poverty levels and average life expectancy of just 51 years, South Africa is not a country we generally associate with extravagant binge-flying lifestyles, turbo-consumerism, and shopping trips to New York. How bizarre then that per capita carbon emissions in South Africa are now higher than in many European countries. While most South Africans are unlikely to ever own a plasma screen TV or Hummer, their carbon footprints still appear to be only slightly less than your average Japanese, and their national carbon emissions are now greater than those of France.
The situation becomes more comprehensible when you look at South Africa's industrial base, with 60% of South Africa's electricity being guzzled by heavy industry, and most of that comes from dirty coal. Now this key global climate player wants another coal station that would pollute as much as the two dirtiest plants in Britain put together, and cause a further surge in its national emissions – and they want you to pay for it. Far from benefiting ordinary South Africans, they will also be forced into subsidising this artificially low-cost electricity, for the benefit of multinational mining companies. It's no wonder that African civil society movements are leading the opposition to this development.
South Africa's situation is a case study in one of the major political currents that poisoned last year's UN climate talks. At Copenhagen, major emerging economies hid behind their poor to justify why they shouldn't need to take on legally-binding climate targets. Infuriating western governments, they used a rigid interpretation of the wonky principle known in UN-speak as "common but differentiated responsibility" (CBDR) to argue for more "pollution rights", since they have less historical responsibility for causing the carbon problem and less ability to pay to solve it. Never mind the new carbon-constrained realities on the whole world, these powerful developing countries claimed the right to pollute indefinitely, because (just like their industrialised counterparts), they saw short-term strategic interest in securing the largest possible area of global atmospheric territory. In short, a concept developed to promote equity has turned into an excuse to allow ever increasing carbon dioxide concentrations in the atmosphere.
Just as Switzerland offers the super-rich the ability to avoid high taxes, and Uzbekistan-presented high-street clothes chains in Europe with cheap child labour in their cotton fields, South Africa and other major emerging economies like China are beginning to exploit the CBDR principle to establish themselves as global havens for the most environmentally destructive industries on Earth. South Africa is effectively setting up shop as a high-carbon economic zone to encourage in foreign companies by freeing them of carbon regulation.
After Copenhagen, the attitude of the most powerful industrialising countries caused much spluttering on the part of western ministers. Ed Miliband was enraged at what he saw as an unfair apportioning of the blame to the industrialised world after the managed collapse of the negotiations, and wrote: "The vast majority of countries, developed and developing, believe that we will only construct a lasting accord that protects the planet if all countries' commitments or actions are legally binding. But some leading developing countries currently refuse to countenance this."
That's why it's so odd that western governments, including our own, now seem determined to egg them on by making a $3.7bn (£2.4bn) World Bank loan to the South African state-owned power company Eskom to help build one of the most polluting power stations in the world. With one hand the government complains about major emerging economies not doing enough to embrace low-carbon development, while at the same time, it directs money that's meant for aid, into dirty coal developments that power the international mining industry.
In fairness, Miliband's comments were clearly directed at China. There was a time last year when climate progressives in the South African government seemed to be his most effective allies in the south. By establishing a reasonable 2020 climate target the South African government positioned themselves in Copenhagen as a bridge between the developed and developing worlds. But in retrospect, with an aspiration to get up to 95% of their electricity from coal by 2025, despite vast untapped clean energy potential, last year's rhetoric looks like a very thin green veneer. Well, either that or the South African government's principled stand has since been quashed by Big Carbon lobbying.
Recognising that a tonne of CO2 from a South African coal plant is just as damaging as a tonne from anywhere else, the White House has signalled they won't offer their support to subsidise the Eksom mega-coal plant in South Africa when it comes up for a vote at the World Bank next week. Yet as the single biggest donor to the Bank, it will be the UK which is likely to get the final say. This offers a key test of whether the climate progressives in our own government can win out.
Source: The Guardian
The situation becomes more comprehensible when you look at South Africa's industrial base, with 60% of South Africa's electricity being guzzled by heavy industry, and most of that comes from dirty coal. Now this key global climate player wants another coal station that would pollute as much as the two dirtiest plants in Britain put together, and cause a further surge in its national emissions – and they want you to pay for it. Far from benefiting ordinary South Africans, they will also be forced into subsidising this artificially low-cost electricity, for the benefit of multinational mining companies. It's no wonder that African civil society movements are leading the opposition to this development.
South Africa's situation is a case study in one of the major political currents that poisoned last year's UN climate talks. At Copenhagen, major emerging economies hid behind their poor to justify why they shouldn't need to take on legally-binding climate targets. Infuriating western governments, they used a rigid interpretation of the wonky principle known in UN-speak as "common but differentiated responsibility" (CBDR) to argue for more "pollution rights", since they have less historical responsibility for causing the carbon problem and less ability to pay to solve it. Never mind the new carbon-constrained realities on the whole world, these powerful developing countries claimed the right to pollute indefinitely, because (just like their industrialised counterparts), they saw short-term strategic interest in securing the largest possible area of global atmospheric territory. In short, a concept developed to promote equity has turned into an excuse to allow ever increasing carbon dioxide concentrations in the atmosphere.
Just as Switzerland offers the super-rich the ability to avoid high taxes, and Uzbekistan-presented high-street clothes chains in Europe with cheap child labour in their cotton fields, South Africa and other major emerging economies like China are beginning to exploit the CBDR principle to establish themselves as global havens for the most environmentally destructive industries on Earth. South Africa is effectively setting up shop as a high-carbon economic zone to encourage in foreign companies by freeing them of carbon regulation.
After Copenhagen, the attitude of the most powerful industrialising countries caused much spluttering on the part of western ministers. Ed Miliband was enraged at what he saw as an unfair apportioning of the blame to the industrialised world after the managed collapse of the negotiations, and wrote: "The vast majority of countries, developed and developing, believe that we will only construct a lasting accord that protects the planet if all countries' commitments or actions are legally binding. But some leading developing countries currently refuse to countenance this."
That's why it's so odd that western governments, including our own, now seem determined to egg them on by making a $3.7bn (£2.4bn) World Bank loan to the South African state-owned power company Eskom to help build one of the most polluting power stations in the world. With one hand the government complains about major emerging economies not doing enough to embrace low-carbon development, while at the same time, it directs money that's meant for aid, into dirty coal developments that power the international mining industry.
In fairness, Miliband's comments were clearly directed at China. There was a time last year when climate progressives in the South African government seemed to be his most effective allies in the south. By establishing a reasonable 2020 climate target the South African government positioned themselves in Copenhagen as a bridge between the developed and developing worlds. But in retrospect, with an aspiration to get up to 95% of their electricity from coal by 2025, despite vast untapped clean energy potential, last year's rhetoric looks like a very thin green veneer. Well, either that or the South African government's principled stand has since been quashed by Big Carbon lobbying.
Recognising that a tonne of CO2 from a South African coal plant is just as damaging as a tonne from anywhere else, the White House has signalled they won't offer their support to subsidise the Eksom mega-coal plant in South Africa when it comes up for a vote at the World Bank next week. Yet as the single biggest donor to the Bank, it will be the UK which is likely to get the final say. This offers a key test of whether the climate progressives in our own government can win out.
Source: The Guardian
Friday, March 26, 2010
Cosatu welcomes Public Protector finding on Moosa
The Congress of South African Trade Unions (Cosatu) on Friday expressed concern after the Public Protector found that former Eskom chairperson Valli Moosa acted improperly when the utility awarded a contract for the Medupi power station to the Hitachi consortium.
Former Public Protector Lawrence Mushwana found that Moosa failed to manage a conflict of interest arising from the 25% stake of African National Congress (ANC) investment company Chancellor House in Hitachi Power Africa. This stake means that the ruling party stands to make up to R5,8-billion out of the contract. "Cosatu welcomes the report and congratulates Comrade Lawrence Mushwana for exposing the fact that the ANC stood to benefit by up to R5,8-billion," it said.
Mushwana found that Moosa, a member of the ANC's national executive committee, failed to declare the conflict of interest and failed to recuse himself from the board's deliberations. These failings could have resulted "in the reasonable perception that Mr Moosa was biased in respect of the ... award", Mushwana said in his report tabled in Parliament on Thursday. He recommended that Public Enterprises Minister Barbara Hogan consider introducing legislation to regulate the way business is conducted between government entities and political parties.
Cosatu backed his call and said his finding was so disturbing that Eskom's 25% tariff increases over the next three years should be reviewed. "There is now a serious question mark against whether there were vested interests involved in supporting the increases." Mushwana said Moosa's improper conduct did not affect the validity of the deal, which has been criticised by the political opposition.
Source: Mail & Guardian
Former Public Protector Lawrence Mushwana found that Moosa failed to manage a conflict of interest arising from the 25% stake of African National Congress (ANC) investment company Chancellor House in Hitachi Power Africa. This stake means that the ruling party stands to make up to R5,8-billion out of the contract. "Cosatu welcomes the report and congratulates Comrade Lawrence Mushwana for exposing the fact that the ANC stood to benefit by up to R5,8-billion," it said.
Mushwana found that Moosa, a member of the ANC's national executive committee, failed to declare the conflict of interest and failed to recuse himself from the board's deliberations. These failings could have resulted "in the reasonable perception that Mr Moosa was biased in respect of the ... award", Mushwana said in his report tabled in Parliament on Thursday. He recommended that Public Enterprises Minister Barbara Hogan consider introducing legislation to regulate the way business is conducted between government entities and political parties.
Cosatu backed his call and said his finding was so disturbing that Eskom's 25% tariff increases over the next three years should be reviewed. "There is now a serious question mark against whether there were vested interests involved in supporting the increases." Mushwana said Moosa's improper conduct did not affect the validity of the deal, which has been criticised by the political opposition.
Source: Mail & Guardian
Thursday, January 28, 2010
Stand-Alone Body Planned to Level Electricity Playing Fields
The Department of Energy is planning to complete by end-March a new legal framework which will establish an independent system operator to buy electricity from Eskom and independent power producers. Initial suggestions were that only electricity from independent power producers would be bought by the independent system operator, but this has now been broadened to include Eskom's power. The aim of the new system is to create a level playing field between Eskom and independent producers so that the latter would not have to negotiate power purchase agreements with Eskom.
Eskom's designation as the sole buyer of electricity from independent producers has been a major stumbling block to developing a vibrant independent generation industry, as the utility has been reluctant to buy relatively more expensive power from independent producers. This has meant the government has not met its target to have at least 30% of all power generated by independent producers.
The new model - used extensively in countries where the private sector contributed to power generation such as Australia, the US, Argentina and Norway - would not affect Eskom's viability, the energy department's director-general, Nelisiwe Magubane, said yesterday. This was because both Eskom's power and that of the independent producers would be bought by the independent body at the tariffs determined by the National Energy Regulator of SA (Nersa). The same tariff would apply to all power purchased.
Magubane said that more private players would be attracted to the industry once tariffs rose after Nersa had decided on Eskom's 35% tariff application. She said the Cabinet had instructed the department at its last meeting last year to develop the model of independent power purchase and to report back to it before the end of March. Magubane said the proposed model would ensure the wholesale purchase of power by the independent operator was transparent and took place outside Eskom. The electricity would then be resold in bulk for transmission and distribution by Eskom and municipalities. "What has been happening is that Eskom has been acting like a real monopoly, trying to keep other players out of the industry," Magubane said. "We want to take that function of buying power away from it."
Magubane said Eskom was happy with the proposal and was working with the department on how best to implement it.
Source: All Africa
Eskom's designation as the sole buyer of electricity from independent producers has been a major stumbling block to developing a vibrant independent generation industry, as the utility has been reluctant to buy relatively more expensive power from independent producers. This has meant the government has not met its target to have at least 30% of all power generated by independent producers.
The new model - used extensively in countries where the private sector contributed to power generation such as Australia, the US, Argentina and Norway - would not affect Eskom's viability, the energy department's director-general, Nelisiwe Magubane, said yesterday. This was because both Eskom's power and that of the independent producers would be bought by the independent body at the tariffs determined by the National Energy Regulator of SA (Nersa). The same tariff would apply to all power purchased.
Magubane said that more private players would be attracted to the industry once tariffs rose after Nersa had decided on Eskom's 35% tariff application. She said the Cabinet had instructed the department at its last meeting last year to develop the model of independent power purchase and to report back to it before the end of March. Magubane said the proposed model would ensure the wholesale purchase of power by the independent operator was transparent and took place outside Eskom. The electricity would then be resold in bulk for transmission and distribution by Eskom and municipalities. "What has been happening is that Eskom has been acting like a real monopoly, trying to keep other players out of the industry," Magubane said. "We want to take that function of buying power away from it."
Magubane said Eskom was happy with the proposal and was working with the department on how best to implement it.
Source: All Africa
Thursday, November 12, 2009
Eskom board confirms Maroga's resignation
Jacob Maroga has resigned as CEO of Eskom, the electricity parastatal's board said on Thursday. "Eskom confirmed that Mr Maroga has resigned. His intention to resign was welcomed by the board," acting board chairperson Mpho Makwana told reporters at Eskom's Megawatt Park head office in Johannesburg.
The announcement ended days of speculation on Maroga's position at the parastatal after a power struggle between Meroga and former board chairperson Bobby Godsell. While Maroga's resignation was announced last week Thursday to Eskom's staff by Godsell, Maroga reportedly returned to work on Monday. On the same day, November 9, Godsell handed in his resignation, saying that the government had refused to support Eskom's board in resolving its dispute with Maroga.
In recent months, Maroga had been criticised for sacking international energy consultant Susan Olsen, who warned in a confidential memo that Eskom's coal-procurement practices were placing electricity supplies in jeopardy. Maroga seemingly ignored Olsen's advice and the country was then plunged into a period of load-shedding in January 2008. Other official Eskom documents were also leaked which painted a picture of its lack of understanding of coal markets and how skilled staff had departed from the parastatal.
The Democratic Alliance recently released a report by Eskom's technical corporate audit division, which highlighted the serious shortages in senior staff at the utility and supported Olson's earlier findings.
Source: Mail & Guardian
The announcement ended days of speculation on Maroga's position at the parastatal after a power struggle between Meroga and former board chairperson Bobby Godsell. While Maroga's resignation was announced last week Thursday to Eskom's staff by Godsell, Maroga reportedly returned to work on Monday. On the same day, November 9, Godsell handed in his resignation, saying that the government had refused to support Eskom's board in resolving its dispute with Maroga.
In recent months, Maroga had been criticised for sacking international energy consultant Susan Olsen, who warned in a confidential memo that Eskom's coal-procurement practices were placing electricity supplies in jeopardy. Maroga seemingly ignored Olsen's advice and the country was then plunged into a period of load-shedding in January 2008. Other official Eskom documents were also leaked which painted a picture of its lack of understanding of coal markets and how skilled staff had departed from the parastatal.
The Democratic Alliance recently released a report by Eskom's technical corporate audit division, which highlighted the serious shortages in senior staff at the utility and supported Olson's earlier findings.
Source: Mail & Guardian
Wednesday, September 5, 2007
Eskom looks to nuclear plants
South Africa's largely coal-driven power utility Eskom has hit the limits of its capacity and aims to double output by 2025, with nuclear plants supplying more than a quarter of future energy compared with 6% now. Eskom's chief executive Jacob Maroga told a coal conference on Tuesday the state-owned firm would cut back on polluting coal-fired plants that have made South Africa the world's lowest cost electricity producer. "The issues we're faced with are costs and lead time, but the debate around global warming is key, because coal is a big contributor to carbon dioxide emissions," Maroga told the Coaltrans conference. "We can now finally say we have run out of surplus capacity."
Maroga said plans to boost output to 80 000 megawatts (MW) by 2025 would include adding 20 000 MW of nuclear-supplied energy as well as extra renewable capacity. The proportion of output from coal would fall below 70% by 2025 from 86% currently. "All over the world nuclear is coming back," he said. "Going forward the electricity prices we have will not be sustainable."
The two reactors at South Africa's Koeberg, Africa's only nuclear-fired facility, generate some 6% of the country's electricity, mainly used around Cape Town. Maroga said South Africa, one of the biggest producers of uranium, was building a multi-billion dollar new technology pebble bed modular reactor (PBMR), and has mooted building more conventional plants to add to Koeberg.Eskom was currently planning to expand yearly by 4%, to keep up with a projected 6% growth in the gross domestic product of Africa's biggest economy.
The company has already outlined a R150-billion spending programme from 2007 to 2011, with more to follow.
Source: Mail & Guardian
Maroga said plans to boost output to 80 000 megawatts (MW) by 2025 would include adding 20 000 MW of nuclear-supplied energy as well as extra renewable capacity. The proportion of output from coal would fall below 70% by 2025 from 86% currently. "All over the world nuclear is coming back," he said. "Going forward the electricity prices we have will not be sustainable."
The two reactors at South Africa's Koeberg, Africa's only nuclear-fired facility, generate some 6% of the country's electricity, mainly used around Cape Town. Maroga said South Africa, one of the biggest producers of uranium, was building a multi-billion dollar new technology pebble bed modular reactor (PBMR), and has mooted building more conventional plants to add to Koeberg.Eskom was currently planning to expand yearly by 4%, to keep up with a projected 6% growth in the gross domestic product of Africa's biggest economy.
The company has already outlined a R150-billion spending programme from 2007 to 2011, with more to follow.
Source: Mail & Guardian
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