Erwin+keeps+South+Africa+in+the+dark,+James+Myburgh,+Politicsweb

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=Erwin keeps South Africa in the dark=


 * James Myburgh, Politicsweb, 28 February 2008**

//Minister of Public Enterprises evades parly questions on Eskom coal shortages//

Over the weekend Eskom ran three-page advertisements in all the Sunday newspapers. The first page covered the immediate (‘we have had a coal problem') and longer term causes of the recent crisis; the second page, what Eskom plans to do about South Africa's power shortage; and, the third, sets out how consumers can try and reduce their electricity consumption. The intention of this public relations exercise was, presumably, to try and restore public confidence in the utility after last month's devastating power outages. However, if Alec Erwin's answers to a series of parliamentary questions on Eskom's coal supply issues are any guide, then our national electricity utility still prefers to keep South Africans in the dark.

On the issue of coal stockpiles
As is now generally acknowledged, the immediate cause of the crisis in January was an acute shortage of coal at many of Eskom's coal-fired power stations. Erwin was asked by the Democratic Alliance, in his capacity as Minister of Public Enterprises: "What were the overall coal stockpiles (a) maintained by Eskom in (i) tons and (ii) days of burn from 2000 to 2006 inclusive and (b) at each of Eskom's coal fired power stations in the past 12 months in (i) tons and (ii) days of burn?" (Question 59)

In his reply Erwin refused to divulge any of the requested information. He stated only that, "Eskom endeavours to keep the stockpiles at each station at a minimum of 20 days. In the last year, some station stock levels declined to low levels. This is currently being addressed as a matter of urgency."

The reason given for not providing the actual information requested was that "The detail in this regard is confidential and its disclosure could be prejudicial to Eskom and the security of supply and could lead to significant cost escalations."

This excuse is hardly a persuasive or coherent or even plausible one. For one thing some of this information at least is already in the public domain. For instance, Eskom's annual report for 2002 stated that coal stock at the end of 2001 "was 14,8 million tons (2000: 19,8 million tons) representing 44 days (2000: 61 days) of burn." If Eskom was able to provide that information then, why is it not possible for Erwin to provide exactly that same information now?

For another thing, Eskom's senior officials have been willing to provide further "detail in this regard" when it suits them. On February 1 the Eskom General Manager Rob Lines was quoted in [|Business Report] as saying that average coal stocks "had fallen to 1-3 days prior to the rolling blackouts, but had been raised to 5-6 days by the end of January." On February 14 [|Mining Weekly] quoted Brian Dames - chief officer for Eskom's operating business - as saying that Eskom's stockpiles were currently at below ten days. If senior Eskom officials can provide this level of information to journalists, why are they and Erwin suddenly struck dumb when asked a formal parliamentary question on the matter?

On the cost of coal
In another question Erwin was asked about the average cost of coal it had purchased from 2000 to 2006 in terms of its long-term supply agreements versus on the spot market. It would obviously be interesting to see the price differential (if any) between those two modes of coal procurement. Erwin was also asked how much coal Eskom had purchased from BEE companies in terms of long term supply agreements, and the average cost, in each of the past five years.

Erwin simply refused to answer any of these questions, stating "The department cannot disclose information on coal coasts because that would be prejudicial to Eskom in its negotiations for additional coal." Again, in better days Eskom was quite happy to provide this information. It's 2000 annual report stated that, "The average cost of coal burnt during 1999 was R42,79 per ton (1998: R40,69 per ton)." Erwin failed to explain why he was not going to answer the question on how much coal Eskom had purchased from BEE companies on long term supply contracts.

On BEE purchases on the spot market
Erwin was also asked the names of the BEE companies which supplied coal on the spot market to Eskom in 2007; how much coal each company provided; and how much these suppliers were paid. He was also asked: "whether any problems were encountered with the quality of coal supplied by such companies; if so, what are the relevant details?"

Erwin failed to answer how much coal was being purchased from BEE companies on the spot market. He gave instead the total figure of 29,2MT purchased (which was in Eskom's 2007 annual report anyway.) He did however list the BEE Companies which supplied coal to Eskom as:

Liketh Investments (Pty) Ltd Sudor Coal (Pty) Ltd Mashala Resources (Pty) Ltd Kuyasa Mining (Pty) Ltd Exarro Resources (Pty) Ltd Zingisa Coal (Pty) Ltd Eyethu Coal

He refused to provide any more detail on the basis that "Contracts signed between Eskom and its suppliers are confidential." In answer to the second part of the question Erwin stated: "The quality of coal supplied from the above suppliers was within the contractual specifications."


 * From: http://www.politicsweb.co.za/politicsweb/view/politicsweb/en/page71619?oid=86743&sn=Detail **

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