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SAFTU statement on Eskom 5.2% tariff hike announced by Nersa

The South African Federation of Trade Unions is shocked at the reappointment of Matshela Koko to his position as acting CEO of Eskom, while Parliament is still investigating serious charges of corruption and mismanagement against Eskom executives, including Koko.
SAFTU has also noted the 5.2% tariff increase granted to Eskom by the National Electricity Regulator (NERSA) for the period between 1 April 2018 and 31 March 2019.
This is well below the 19.9% increase requested in Eskom’s application to NERSA, which SAFTU strongly opposed and the federation welcomes this reduction, although it is still above the rate of inflation and we need to see how much municipalities will add on to the 5.2% rise before we can approve this lower increase.
SAFTU stands by its demand for free electricity for poor consumers and affordably priced electricity for industry. Power is today as vital for a decent life as water and should not be treated as a commodity to be sold at market value

The federation is also still convinced that Eskom’s deep underlying problems remain. There is mounting evidence that it is poorly led and its senior management team is drowning in scandals.

Parliament is now conducting an inquiry into the allegations in the former Public Protector’s report on ‘The State of capture’, which includes looking at the serious allegations about Eskom which have already exposed its management’s utter incompetence and its involvement in very serious levels of corruption.

In just two years it has had three CEOs! Its CFO has been suspended under a cloud of corruption and mismanagement.
Having failed to convince NERSA that the consumers must bail them out, they are likely to turn to government to do so. If granted it will mean that the public, in the form of tax-payers will be expected to cough up what Eskom has been unable to take from them as consumers. Already President Zuma has instructed his Minister of Finance to cut expenditure by R25 billion and raise taxes by R15 billion.

There can be no justification for entrusting Eskom’s leaders with more money, when they have demonstrated over time to be complete incompetent and corrupt.
The 400% increase in electricity tariffs over the last 10 years and the systematic blackouts which they euphemistically termed ‘load-shedding’ helped to kill the economy, hastened deindustrialisation and contributed to the job-loss blood bath we are experiencing. Eskom says it will only sell 192 953 GWh this year, as opposed to sales of 223 217 GWh last year, which reflects the slow-down in economic growth for which Eskom itself must take much of the blame.

Eskom duped the public into believing in the necessity of ‘load-shedding’, but a Deloitte investigation in 2011 into the emergency procurement of coal contracts concluded in 2008 by Eskom’s Primary Energy Division detailed many irregularities and confirmed that the ‘load-shedding’, which cost South Africa an estimated R300-billion, was seemingly engineered to benefit certain companies.

“It would appear that [former Eskom official] Koos Jordaan, and other Eskom employees, circumvented the prescribed Eskom tender policy and procedure by appointing suppliers under the emergency mandate when, in fact, these services did not relate to the emergency period and should have been dealt with under the normal Eskom procurement policies and procedures… From the interviews conducted, it appears that the 2008 emergency was not managed in the best interest of Eskom and resulted in fruitless and wasteful expenditure being incurred.”

Jobs were lost elsewhere because the power cuts had a major impact on production. For example, the African Rainbow Mineral’s Assmang retrenched NUMSA members at Cato Manor and Machadodorp, citing the price of electricity. This year, it opened Sakura ferroalloys smelter in Malaysia’s town of Sarawak, which occurred because of the availability of cheap hydroelectric power in Malaysia.

Thousands of working class families are languishing in poverty because breadwinners were retrenched, as a result of the collusion and greed of senior Eskom managers and private firms. Their selfish actions have blighted the lives of working class families yet they go unpunished.

Jobs were lost elsewhere because the power cuts had a major impact on production. For example, the African Rainbow Mineral’s Assmang retrenched NUMSA members at Cato Manor and Machadodorp, citing the price of electricity. This year, it opened Sakura ferroalloys smelter in Malaysia’s town of Sarawak, which occurred because of the availability of cheap hydroelectric power in Malaysia.

Thousands of working class families are languishing in poverty because breadwinners were retrenched, as a result of the collusion and greed of senior Eskom managers and private firms. Their selfish actions have blighted the lives of working class families yet they go unpunished.
For the working class, access to safe, clean and free electricity, like water, must be a basic human necessity if people are to live a decent life, and not a commodity which is sold to make a profit, but this price increase would put electricity out of economic reach of millions of people in the country.

As the Parliamentary inquiry is now uncovering, Eskom’s problems are massively compounded by its role as a conduit for the corrupt enrichment of the Guptas and other crony capitalists connected to President Jacob Zuma and top ANC leaders.

Corruption is not just a problem within the public service, or confined to a small circle of political leaders and a few ‘rogue’ capitalists like the Gupta family. In the public sector it is invariably a result of collusion between public officials and Eskom is the best example of this, through its corrupt deals with companies in the private sector including Oakbay and Trillian, which are steeped in corrupt and illegal practices.

To illustrate how deep the problem is we only have to look at the decision by the board of Eskom to reinstate Matshela Koko to his position as acting CEO of the state owned power utility. He had earlier been suspended and an internal probe was asked to be conducted over his involvement in a company, Impulse International, being awarded at least R1 billion in contracts from Eskom, a company that is owned in part by Koko’s step daughter.

Koko allegedly removed Eskom subsidiary Eskom Rotek Industries (ERI) tender submission from the agenda of a meeting, which compromised the company. The tender had been set to be awarded to ERI, but Koko allegedly irregularly removed a submission to that effect from the agenda of the board tender committee.
Koko was also involved in approving a R650 million loan from Eskom to  Gupta-owned Tegeta Resources. This money was then used to purchase the Optimum Coal mine.
Yet now, the Eskom board, while Parliament is still investigating this and other serious allegations, has found Koko not guilty and he has been reinstated by Public Enterprises Minister Lynne Brown. For them it is just business as usual!

More proof is emerging daily that ‘state capture’ has not only benefited the likes of the Guptas and corrupt cadres, but the international financial monopolies who have been colluding with them. The participation of private companies in this looting, such as KPMG, McKinsey, Bell Pottinger, SAP and 20 global banks, is a clear demonstration that capitalism as a whole is a corrupt system that breeds corruption and that is why we reject capitalism.
Eskom are now asking consumers and tax-payers to find the revenue to pay the bill for the billions channeled into the pockets of these corrupt political and economic elite.

SAFTU demands that rather than burdening consumers and taxpayers Eskom must go to court to recover the money stolen by these looters. SAFTU laid charges of corruption against Eskom, Transnet and Trillion management on 4 October 2017. We wish to warn them that they will not escape accountability.

All the crimes against the working class by Eskom and other state-owned enterprises have tarnished the concept that public ownership is the way to improve people’s lives and free the working-class from exploitation and poverty.
The problem arises however not because they are publicly owned, but because they have been captured by a section of capitalists who have acquired all the worst features of those in privately owned enterprises and run them to get rich.

That is why the way to end such corrupt and selfish practices is not privatisation, which will make the situation even worse, but democratic control of, and accountability to, the workers, consumers and communities of South Africa so that they can be run as a public service for the people

In this year when we celebrate the centenary of 1917, when the Russian workers overthrew the Tsar, the feudal aristocracy and the emerging capitalist system, it is time for South African workers to overthrow our diseased and rotting capitalist system, and free the workers and the poor from poverty and exploitation.