Eskom embarked on capital expenditure that SA could not afford - expert

Independent electricity regulator Thembani Bukula attributes the problems at Eskom on the capital expenditure of building power stations that have resulted in cost overruns of between R33 billion to R120 billion per power station.

According to Bukula, this is a capital expenditure that the country could not afford.

He says the country is currently faced with load shedding because Eskom has not maintained power plants properly.

Read: 'Trimming staff costs forms a huge component of fixing Eskom's problems'

The generation capacity is far more higher than the demand so in essence if we had our power stations being operated properly we would not be having load shedding.

Thembani Bukula, Independent Electricity Trader

Public Enterprise Minister Pravin Gordhan says the two power stations that were recently built, (Kusile and Medupi) were badly designed and are not operating to their optimum level.

Questions are being asked as to why nothing was done to mitigate the problems earlier.

Generally, the way that the regulation works is that the cost of the overrun can only be measured when the project is complete. The regulation doesn't allow you to do anything before the project is complete.

Thembani Bukula, Independent Electricity Trader

To hear the rest of the conversation with Thembani Bukula, listen below:


This article first appeared on 702 : Eskom embarked on capital expenditure that SA could not afford - expert


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