Current issue news: December 2011 Back to previous

Electricity in Free State – who to blame?

• Johann Dannhauser

“Eskom is killing local government in South Africa. It intends raising next year its tariffs with a further 27,06%, but we at Centlec are allowed by Nersa to increase our tariffs by only 17,84%.” Mr. Shimi Poolo, CEO of Centlec, has told the Free State Business Bulletin in an interview.

Poolo says that Centlec just had to pay R230 million of arrears to Eskom plus a whopping R20 million in interest. “If this continuous, Centlec would operate only to pay Eskom.”

This results in just about no funds left for maintenance of the existing electricity network for which Centlec is responsible. Matters are being aggravated by the fact that Centlec has more than R100 million outstanding debt from residents, the business sector and government institutions.

According to Poolo, Centlec at present spends 70% of its budget on bulk purchasing from Eskom, leaving very little budgetary provision for maintenance, salaries and capex.

At a business breakfast recently in Bloemfontein, Mr. Brian Dames, CEO of Eskom, said that municipalities in the Free State are owing Eskom in total R296 million in arrears, 54% of which is already more than ninety days outstanding.

Dames also mentioned that theft and vandalism takes a huge slice out of income in the Free State – 19% - 34%.

Meanwhile, some members of the National Association of Managing Agents are threatening Centlec with court action because of alleged erroneous procedures in levying electricity tariffs.

So the question is: In the electricity game, who is to blame? Municipalities, Centlec, Eskom, Nersa, body corporates, non-paying consumers, electricity thieves and / or whoever? Or does everyone share a portion of the blame?

As for Bloemfontein, the Bloemfontein Chamber of Commerce & Industry (BCCI) earlier in the year established an Energy Forum for all stakeholders to synergize around the table for a best possible local solution. Perhaps this still offers the best way towards a mutually acceptable dispensation, especially for the end consumer.