We Have To Lower The Price Of Eskom Coal – Gordhan

Coal suppliers need to help efforts to turn around Eskom by being reasonable on their pricing, Public Enterprises Minister Pravin Gordhan said on Tuesday.

“We have got to lower the price of coal. We are talking to coal suppliers to make sure they contribute, they have to share the burden,” Gordhan said while answering questions in the National Assembly.

He said Eskom was returning to the practice of cost-plus mines, in which power plants rely on mines located next to them at preferential prices, after moving away from the practice during the period in which the power utility was extensively plundered by politically connected companies in the so-called state capture scandal.

It ensured quality control and transparency in pricing, he said.

Eskom posted its results for the first six months of the financial year last week, and cautioned that it would probably again register a loss of around R20 billion for the full year.

It said the debt owed to it by municipalities had increased to R25.1 billion. On Tuesday, Parliament’s watchdog Standing Committee on Public Accounts (Scopa) heard that by the end of October, this had increased by R1.2 billion in the space of one month, to almost R26.4 billion.

The committee resolved that the 20 municipalities owing Eskom the most money must provide payment plans by the end of February next year, on how they were going to service their debt.

Municipalities were advised to install smart prepaid electricity metres in all households to curb the escalating debt.

Scopa chairman Mkhuleko Hlengwa said: “The fact of the matter is that Eskom must be paid if the payments are not made it means there must be more bailouts and we do not have resources for these bailouts.”

The committee heard that of the existing 48 payment agreements with municipalities in arrears, only 11 were being honoured.