DEVIOUS ANC NOW PLANS TO SOCK PRIVATE ELECTRICITY CONSUMERS TO SUPPLY ESCOM’s SHORTFALLS

 

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Article compiled and posted by: White Nation correspondent Pretoria  17 May  2019

 

 

 

SOUTH AFRICA– THE  PIRATE’s REALM DOWN SOUTH

 

AS we all are quite aware of does everything the ANC les incompetents put their sticky fingers onto normally  turns into a disorganized pile of sh*t. And  not only that- whenever they screwed-up- they simply shift the blame to someone else to carry.Such is their most recent stunt they now want to pull to salvage their one most lucrative racketeering non-functioning corrupt venture- Eskom.

Many private businesses now lost confidence in this useless overstuffed-cadre inflated unreliable money sucking vacuum cleaner which is bad news for anyone trying to run a reasonable business . Now Eskom – for quite a number of years that is- was basically surviving on government (read tax payer) hand-outs and humongous irresponsible loans  only to keep it’s historical old coal powered dinosaurs  that belonged to a forgotten era running while the cadre hoodlums were stealing it’s life-supporting financial vaults empty.

China holding back bail out loans due to non-confident cadre promises…the scrambling to generate funds

China is so wary of Eskom’s promises about the construction of Medupi and Kusile that it’s still withholding a R7 billion payment out of fear that the power utility might not continue with the construction of the projects. Rapport  newspaper previously reported that the Chinese Development Bank (CDB) was meant to have transferred the money in March, and the fact it didn’t do so had led to a scramble to scrape together emergency funding for Eskom. At the eleventh hour, Absa granted Eskom a short-term loan of R3 billion. The government said the CDB was going to transfer the money in April, but that also did not happen. Adrian Lackay, spokesperson for Minister of Public Enterprises Pravin Gordhan, confirmed that senior department officials had flown to Beijing to consult CDB officials. He said the meetings had gone well and the transfer would happen soon. He said the loan was not in danger.

The transfer is part of a much bigger loan of more than R33 billion which was concluded between Eskom and the CDB a little less than a year ago. The loan was meant only for construction costs in respect of the ongoing projects and the Chinese were concerned that the money would be sucked up by ( humongous)salaries and diesel for turbines. These fears were sparked by public comments that Eskom was considering scrapping the construction projects. Jabu Mabuza, – ( the hundredth) chairperson of Eskom,had since emphasized that the projects would continue after a full analysis of the costs and benefits. Peter Attard Montalto, head of capital market research at Intellidex, suggested in a note to investors that the Chinese interest in Eskom is broader than just this one load to Eskom to complete Medupi and Kusile, and that they might have an appetite for equity investment in the power utility. “The Chinese position is interesting considering what wider conditionality there could be as part of the broad suite of Chinese loans to Eskom – which could include potential collateral of future equity as one potential example. Eskom’s status in a broader sense is therefore important to the Chinese.”

The Chinese position was important when one took into account conditions that might exist as part of the larger bundle of Chinese loans to Eskom – which could include a future interest (in Eskom) as one potential example. Eskom’s status in a broader sense was therefore important to the Chinese, said Montalto. Gordhan’s public enterprises department put out fires  over market speculation that the Chinese wanted to lay their hands on Eskom’s assets. The government earlier announced that Eskom would be split into three and that it would seek co-shareholders for the transmission business. Lackay said the CDB loan existed entirely independently of all the speculation. The loan was guaranteed by the government (tax payers again) and was not backed by Eskom’s assets. Lackay said if Eskom defaulted on complying with its obligations in terms of the loan, the Chinese would have no right to attach any part of Eskom. The regime would have to pay the debt on behalf of Eskom (iow the tax payer) . But that did not mean potential Chinese interest in investing in Eskom as part of the unbundling process would not be considered, Lackay said. The government still had to appoint an official to facilitate the unbundling and it was expected that it would have to provide Eskom with further financial assistance in the interim.

Montalto said that if the R7 billion from the CDB was transferred soon, and taking into account the emergency funding the government had secured, Eskom should be able to pay its bills over the short term. He had, however, repeated his warning that the government would have to give Eskom a second, much larger bailout to shore up the R250 billion hole in its balance sheet. If that did not happen before the end of June, it was expected that auditors would have to qualify Eskom’s financial statements for the year ending in March as a result of its inability to proceed as a going concern. That could have a disastrous impact on both Eskom and the whole economy.

MEANWHILE  an urgent Treasury report signed by Finance Minister Tito Mboweni to Parliament earlier this month highlights just how dire Eskom’s financial situation is after a China Development Bank (CDB) loan failed to materialize, nearly plunging Eskom further into a liquidity crisis. The report also says that Eskom does not expect to be able to generate enough cash to pay all of its maturing financial obligations over the next five years. The purpose of the report to the legislature was to inform it of Mboweni’s bid to invoke section 16 of the Public Finance Management Act, authorizing a fund transfer to the embattled power utility so that it “could meet its obligations and avoid a call on its existing guarantees”. Mboweni said that at the time when he delivered his Budget speech in February, it was anticipated that Eskom would continue to raise the required funding, which is supported by Government guarantees,(tax payers money)  until Parliament was constituted following the elections.

‘Eskom experiencing difficulties’

Furthermore that the appropriation of the R23bn would follow the normal Appropriation process and therefore that the funds would be disbursed between August and October 2019. “However, by the end of March 2019, it became evident that Eskom was experiencing difficulties in raising the required funding as well as drawing down on existing facilities,” Mboweni wrote. He said Eskom had expected to drawdown R7bn from the CDB facility of $2.5bn, which was concluded in July 2018. “Although CDB had committed to disburse these funds to Eskom by 25 March 2019, the bank was unfortunately unable to timeously execute this planned drawdown due to its central bank exchange control requirements,” the report said, adding that the CDB had since indicated that the planned drawdown would now be executed during April.

‘Liquidity challenges’

Mboweni went on to say that the delay in accessing the funding meant Eskom was unable to meet its obligations that were due at the end of March and resulted in the power utility experiencing “liquidity challenges”. National Treasury then approached the Corporation for Public Deposits in late March to access a R4.6bn facility while Eskom waited for the CDB funds, but this was declined. Mboweni said as a contingency measure, Eskom requested Absa Capital to provide a R3bn bridging facility, which was supported by a government guarantee.  Currently government’s exposure to Eskom in terms of guarantees is R281bn. In the report Mboweni said the failure of Eskom to meet its obligations may have triggered a call on government guarantees.

‘Cash flow inadequate’

“Even after accounting for funds raised, cash flow is not adequate to fund its capital expenditure program,” the report read. Eskom spokesperson Khulu Phasiwe could not be reached for comment on Friday while Public Enterprises Minister Pravin Gordhan’s spokesperson Adrian Lackay told Bloomberg on Thursday that Eskom needed the funds to be transferred as quickly as possible to ensure its financial stability.  Eskom is saddled with R419bn of debt and isn’t selling enough power to cover its interest payments and operating costs, a legacy of years of mismanagement and cost overruns on new plants.

ANC Regime take a 180 degree spin around on their Eskom monopoly- now looking at private enterprises to support Eskom

FOR years Eskom and it’s evil twin NERSA kept private entrepreneurs out of the power supply business. Between this two evil twins they ran the power supply monopoly for years. However- after the 2019 election Ramaphosa and his ilk are cornered to produce what  their smooth tongues wagged about-  and honor their election  promises they made- and one of this is to prevent another barrage of load shedding again. But with China’s reluctance to release the R 7 billion bail out- the ANC are literally running into circles trying to prevent yet another catastrophe they themselves created over the years by allowing Eskom’s racketeering sprees and incompetent glutenous cadre management to spin out of control. Now that China put them into a predicament Ramaphosa and his cronies again are trying to divert their responsibilities to the already over-burdened private sector milking cow again to stand in for the ANC’s idle promises. 

Shortly after several industrialists and mining houses announced that they wanted to become self-sufficient with the availability of electricity- iow free energy sources- , the ANC’s Energy Minister immediately saw a gap to help Eskom. Minister Jeff Radebe has apparently “paved the way” for private institutions to generate power to be incorporated in the Eskom network, but such institutions must first register as power generators. Observers say if the minister’s intention is that private institutions will be required to provide Eskom with  electricity generated by themselves , nothing will come of it.  Electricity generation by private entities, according to experts, can only be used for own use without registering with the government, and cannot be made available to Eskom. Observers say the private institutions that plan to become self-sufficient will not consider doing so senselessly by generating power-  and then delivering to the unreliable Eskom.

Add to that the relentless attacks by Eskom on the business sectors with load shedding upon load shedding  due to millions of black residential areas such as Soweto that bluntly refuse to pay for their services, mega amounts of electricity that are supplied to neighboring countries such a Zimbabwe et al that not only filled the pockets of Eskom racketeers – but  cost the economy and business millions of rands in lost revenue and the intimidation caused by this load shedding games Eskom played to spike tariff hikes , the humongous unchecked corruption by one-after-the-other Eskom board members running into billions of rands-  then one can fully  sympathize with the private sector which now is  more than reluctant to assist Eskom. 

For years private institutions tried in vain to convince Eskom and NERSA to allow private institutions to install free energy power generators and also free energy systems in households to generate power. International companies even proposed they would build new power stations that would generate double the amount of power at half the cost and maintenance than the old coal relics now in use. Excess power not utilized can then be sold back to the grid- thus ensuring that there are more than ample electricity which in turn will force the price of electricity to come down  dramatically for the consumer. But greedy racketeers as Eskom , NERSA and the ANC regime are- they would have nothing of it. They want to run the sole monopoly on power supply and tenders for the “brothers ” from supplies and maintenance points of view . The ANC want to keep their dirty claws deep into this money-spinning machine- that is why they will NEVER really privatize it- but Ramaphosa cleverly thought out a new term- ”  unbundling” it…iow just break it up to be able to hide the plundering better-confuse the audit general even more-let it appear that the losses are smaller than one accumulated total amount-  but still keep in the firm grasp of the ANC hoodlums to plunder. They will never kill the goose that lays the golden eggs in laundering millions of tax payers money into private accounts as they do with the rest of the parastatals such as SAA, Transnet, SABC, Post Office and so on.

BUT Eskom is not the only villain in the story- the City Councils also are BIG culprits with fat cat councilors  digging in deep – and they are responsible for high tariffs and would also loose a substantial amount of income should the public go for free energy. Cape Town City Council is one very good example of councils that bluntly refuse to let go of their racketeering business by threatening consumers to register all power generating equipment such as generators, solar panels and any device that possibly could endanger their electricity racketeering agenda. Non-compliance to adhere to register are threatened with fines up to R 7000.00. Generating one’s own free electricity will ostensibly meddle with their financial racketeering grid. 

SOURCES:

White Nation

ANC-regime se slenter met energie – privaat instansies gaan verplig word om hulle eie elektrisiteit wat opgewek is, aan Eskom te voorsien

 

https://www.fin24.com/Economy/mboweni-on-eskom-bail-out-how-china-loan-delay-triggered-a-scramble-for-funds-20190419

https://city-press.news24.com/Business/china-withholds-r7bn-eskom-loan-20190506

 

 

 

 

 

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