Eskom teeters closer to the edge
Coal supply crisis adds to litany of woes that could see blackouts over Christmas
● Coal shortages that could cause blackouts over the festive season have plunged Eskom even deeper into crisis as it battles governance, financial and operational issues.
On Friday, Abram Masango, executive for the group capital division, was reported to have resigned shortly after the power utility announced his suspension.
Eskom suspended Masango after launching a probe into allegations of impropriety involving the construction of the Kusile power station. Work began on the coal-fired station a decade ago at the height of SA’s energy crisis and has run into cost overruns and production delays.
“Whilst we recognise his rights to be presumed innocent, however, given the serious nature of the allegations made against him and the seniority of his position … the Eskom management took a decision to place him on suspension pending the outcome of the investigation,” the company said in a statement.
Masango is one of several executives who have left the utility this year since the appointment of a new board in January. The board has launched more than 1,000 investigations, leading to the dismissal of a number of employees.
Executives who have left under a cloud in recent months include former CEO Matshela Koko and CFO Anoj Singh. They were named in the public protector’s state capture probe two years ago and in a report into Eskom and Transnet released by the National Treasury on Friday.
The latest report, compiled by Fundudzi Forensic Services, recommended that the Hawks investigate Koko, Singh and Suzanne Daniels, Eskom’s former head of legal and compliance.
Speaking at a media briefing, Eskom group CEO Phakamani Hadebe said on Friday the utility was dedicating R11.5bn over the next 12 months to a nine-point plan to address its coal-supply challenges.
The utility, which typically seeks to have enough coal on hand to last 20 days, said this week that 10 of its 15 coal-fired power stations had less than 10 days of coal left.
This had led Eskom to start using its diesel generators, at far greater cost than it takes to run the coal-fired stations or the Koeberg nuclear plant.
If the supply issues are not resolved in the coming weeks, the utility has warned of imminent blackouts.
“Load-shedding cannot be ruled out,” said Hadebe. “We request South Africans to use electricity sparsely.”
Much depends on the weather — heavy rain could make coal supplies too wet to burn and exacerbate the crisis.
An urgent purchase of 4-million tons is needed to get the utility back to running fully on coal. So far, only 1.1-million tons have been secured.
Normal supply levels are only expected in the first quarter of next year. The utility says it has signed deals with 29 mining companies to deliver 15.7-million tons.
The financial implications for Eskom are not immediately clear.
Hadebe declined to go into details, saying only: “This institution has been going
through financial challenges in the past five to six years … including this year.”
The Gupta-linked Tegeta coal mine, which went into business rescue earlier this year, is receiving part of the blame for the supply crisis because its problems meant Eskom has had to find alternative sources of coal.
The Tegeta case late last year also brought to light that Eskom’s stockpiles of coal were not being reported correctly, which led to a
review of the figures.
Eskom’s coal situation is made worse by not all the coal in stock being usable at its plants.
Much of it is the leftover portion after the prime material has been used and is classified as “unwanted”.
Energy analyst Ted Blom said the scale of Eskom’s supply, financial and equipment problems meant the utility might have to shut down by the end of this year.
Management took a decision to place him [Masango] on suspension