Consumers suffer while Eskom parties on
Whilst Treasury is considering a multiyear price determination proposal (MYPD3) in which Eskom is calling for an almost 100% increase in electricity prices over the next five years, reports of reckless spending by the parastatal raise serious questions about its commitment to delivering energy solutions to “grow the economy and improve the quality of life of people in South Africa”.
The City Press revealed today that Eskom has spent R36 million on parties for its staff and their families. This follows the recent announcement of Eskom’s financial results, which showed a tidy R13.2 billion profit for the 2011/2012 financial year despite a modest 0.2% increase in electricity sales.
Eskom submitted its MYPD3 proposal to Treasury at the end of June. This proposal calls for an increase in electricity prices from 50,3c/kWh to 97,51c/kWh over the next five years. Over the last three years, tariffs have increased by 24.8%, 25.2% and 16.09%, respectively.
Surely, South African consumers cannot be expected to continue making sacrifices to save electricity and to contribute a growing portion of their income to energy costs while the state-owned company tasked with servicing our energy needs spends lavishly on parties?
When reports of the R3 million party held in Cape Town emerged in March, we called on the Special Investigating Unit to include staff parties in their investigation into corruption, fraud and maladministration at Eskom. Given the extent of the funds allocated to staff parties that has now been confirmed through information obtained by the City Press after filing a Promotion of Access to Information Application, we now also believe that Eskom’s management should be called before the Portfolio Committee on Public Enterprises to explain how the decisions relating to these parties were made and how the massive spending was justified.
I will be writing to the chairperson of the Portfolio Committee on Public Enterprise, Mr Peter Maluleka, to request that Eskom Chief Executive Officer Brian Dames be called before the committee to account for the decisions made regarding spending on staff parties.
I will also be submitting questions to the Minister of Public Enterprises, Malusi Gigaba, to ask for information on the budgets for staff entertainment at all major parastatals, including Eskom, South African Airways, Transnet and Alexkor. Parastatals cannot continue to demand major price hikes and government bail-outs if they do not display a commitment to spending their funds wisely.
South African consumers must be protected from parastatal management teams that do not have their priorities straight.
Statement issued by Natasha Michael MP, DA Shadow Minister of Public Enterprise, July 8 2012