In the first two weeks since his appointment, some questionable public statements made by Eskom’s new acting CEO, Brian Molefe, make one wonder whether he is receiving sound information from his executive team. The minister of Public Enterprises, Hon. Lynne Brown, seems to have had similar problems. By CHRIS YELLAND.
After a presentation to the Public Enterprises Parliamentary portfolio committee, and a media briefing thereafter that reeked of unfounded confidence and hubris, Molefe suggested that the solution to Eskom’s financial woes would be to bypass municipal electricity distributors and supply all customers of electricity in South Africa – domestic, commercial, agricultural and industrial – directly, thus extending its monopoly.
Local government, in the form of municipalities, have the constitutional right to distribute electricity. Like Eskom Distribution, they purchase electricity in bulk from Eskom, operate a distribution network, and deliver electricity to residents and businesses embedded in their geographic service areas. Municipalities use surpluses from this activity to cross-subsidise and fund their other municipal service delivery obligations.
While the problems of some 20 defaulting municipalities out of a total of some 180 has been well publicised, it must certainly be galling to the significant majority of municipal electricity distributors to hear …
Source : Daily Maverick