The cost of corruption in South Africa goes up daily, with the latest off shoot a R32.7 billion Eskom recovery plan signed off by the National Regulator. They call it unbudgeted costs incurred in the 2014-17 financial years. Smack bang in the middle of the Zuptoid looting. South Africans have carried the SAA can down the road, and are doing the same with Eskom. And all the reasons listed for Eskom’s woes – weak demand, delinquent municipalities and corruption – are all on the welcome mat of the ANC. The recovery job Cyril Ramaphosa has at hand is not for sissies, and he needs a few wins pronto to stop the splurge of losses he’s currently being faced with. Moody’s is waiting around the corner… – Stuart Lowman
By Ana Monteiro
(Bloomberg) – South Africa’s standard electricity users will bear the brunt of the R32.7 billion ($2.2 billion) the state-owned power utility can recover in unbudgeted costs incurred in the 2014 to 2017 financial years, the energy regulator said.
Eskom Holdings SOC Ltd. is able to raise power prices by at least 4.4 percent starting April 1 to claw back the expenses through its so-called regulatory clearing account, the Pretoria-based National Energy Regulator of South Africa said in an emailed statement Tuesday. It first announced the amount on June 14, and today said standard tariff customers will pay for R31.1 billion of that, with international clients and those on negotiated pricing agreements footing the bill for the rest.
The utility is facing financial strain as a result of factors including weak demand, delinquent municipaliies that don’t pay their bills and widespread allegations of corruption. Eskom wanted to recoup R66.6 billion for the three financial yeas through end-March 2017.
Sources: Bloomberg and Daily Insider/Biz News