Eskom mulling its op­tions in Molefe Labour Court bid

The Star Early Edition - - BUSINESS REPORT - Siseko Njobeni

ESKOM said yes­ter­day that it was work­ing on its le­gal papers after its former chief ex­ec­u­tive Brian Molefe headed to the Labour Court in a bid to get his job back.

In a ma­jor turn of events, Molefe has taken his fight to stay on in his lu­cra­tive job to the Labour Court in Johannesburg. He wants the de­ci­sion to re­move him to be de­clared in­valid and he has cited Eskom and Pub­lic En­ter­prises Min­is­ter Lynne Brown as re­spon­dents.

This is the lat­est de­vel­op­ment in the saga around Molefe. Prior to the board’s de­ci­sion to re­move him, Molefe had been at the helm of Eskom for a few weeks.

But fol­low­ing the in­ter­ven­tion of an in­ter-min­is­te­rial com­mit­tee, Brown or­dered the Eskom board to fire Molefe.

In a terse state­ment, Eskom said its le­gal team was work­ing “ex­pe­di­tiously” to fi­nalise its papers. In the court chal­lenge, Molefe had called into ques­tion the le­gal­ity of the de­ci­sion to re­move him.

Mean­while, Eskom said it had ap­proved a draft rev­enue ap­pli­ca­tion for con­sul­ta­tion with the South African Lo­cal Gov­ern­ment As­so­ci­a­tion (Salga) and the Na­tional Trea­sury over elec­tric­ity tar­iff hikes.

Eskom spokesman Khulu Phasiwe said the power util­ity had sub­mit­ted the draft ap­pli­ca­tion to them in April.

“The Mu­nic­i­pal Fi­nance Man­age­ment Act re­quires Eskom to con­sult with these en­ti­ties be­fore sub­mit­ting its fi­nal rev­enue ap­pli­ca­tion to Nersa (Na­tional En­ergy Reg­u­la­tor of SA).

“They are al­lowed 40 days to pro­vide com­ments. Eskom has re­ceived their re­sponses. The re­sponses from Salga and the Trea­sury are be­ing con­sid­ered. Eskom en­vis­ages that it will sub­mit the fi­nal rev­enue ap­pli­ca­tion to Nersa dur­ing this month,” Eskom said.

The util­ity said it had im­ple­mented Nersa’s de­ci­sion of an av­er­age 2.2 per­cent tar­iff in­crease for the 2017/18 fi­nan­cial year. The in­crease was ef­fec­tive for Eskom cus­tomers from April 1, 2017. Mu­nic­i­pal cus­tomers face an av­er­age 0.3 per­cent in­crease ef­fec­tive on July 1.

“The pre­vi­ous multi-year de­ci­sion made by Nersa for the pe­riod April 1, 2013 to March 31, 2018 comes to an end on March 31, 2018 – there­fore, there is a need for Eskom to make the next ap­pli­ca­tion. Nersa has given the go-ahead for Eskom to make a rev­enue ap­pli­ca­tion for a sin­gle fi­nan­cial year – the 2018/19 year,” Eskom’s chief fi­nan­cial of­fi­cer Anoj Singh said.

Phasiwe de­clined to com­ment on the ac­cu­racy of re­ports that Eskom was seek­ing a tar­iff in­crease of al­most 20 per­cent. He said the util­ity would only com­ment on the fig­ure it would sub­mit to Nersa as part of the ap­pli­ca­tion. “We can­not com­ment on the fig­ure to Na­tional Trea­sury and Salga. That fig­ure is not fi­nal,” he said.

He added that Nersa had given Eskom an op­tion to ap­ply for tar­iff in­creases over one year – 2018/19. “The cur­rent multi-year price de­ter­mi­na­tion (MYPD) comes to an end in March next year,” he said.

Such a move was nec­es­sary given the le­gal chal­lenge to the MYPD method­ol­ogy.

The Pre­to­ria High Court last year set aside the reg­u­la­tor’s de­ci­sion to in­crease elec­tric­ity tar­iffs by 9.4 per­cent un­der a reg­u­la­tory clear­ing ac­count (RCA) ap­pli­ca­tion for the 2013/14 fi­nan­cial year.

It said Nersa’s de­ter­mi­na­tion to al­low Eskom to re­coup R11.2 bil­lion was ir­ra­tional, un­fair and un­law­ful.

Nersa is ap­peal­ing the high court’s de­ci­sion.

RCA is a mon­i­tor­ing and track­ing mech­a­nism that com­pares cer­tain un­con­trol­lable costs and rev­enues as­sumed in a MYPD de­ci­sion – made by Nersa – to ac­tual costs and rev­enues in­curred by Eskom.


The power util­ity’s dis­graced group chief ex­ec­u­tive Brian Molefe is chal­leng­ing his dis­missal in the Labour Court.

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