Eskom ... is there ANY chance? In CPT there is

[plonkster]

What I will say, is that I do find it concerning that the 2024/25 financial year is included in the exemption. If it was an exemption only for past dealings, I would probably be less concerned.

So when I say “probably not as bad as many think”, I’m still giving this about a 3 out of 10. At least the bit that is being exempted is limited. It merely excludes it from the annual report. It doesn’t lift any of the other requirements, such as 55(2)(a), or 55(2)(b)(i), (iii) and so on. It still goes to parliament… and… the exclusion itself is an implicit admission. Let’s not miss that.

They are saying: This is such a f-up we can’t even put a number on it.

[Village_Idiot]

Not my insight but a less nefarious interpretation of the exemption is to reduce negative impact on Eskom’s lending rates - not my insight but taken from here :

“The AG needs to issue an audit report for Eskom based on IFRS and complying with PFMA. There is no definition for “wasteful and irregular expenditure” in IFRS, those terms are from the PFMA. For instance Eskom may have legitimate expenditure but it was not incurred in terms of the PFMA and therefore “irregular”, under IFRS the expenditure is fine but based on the current rules re reporting on the PFMA the AG would have to qualify their report and that has implication on Eskom’s lending rates.”

From news24:

[Sarel.Wagner]

@plonkster

They are saying: This is such a f-up we can’t even put a number on it.

SCOPA can and does, part o their remit. So adding it in the one place, and not the other means they know. It will be massaged and manipulated of course, and other things will now appear on there…

Groetnis

[plonkster]

I’m just doing my usual “is there another way of looking at this” thing. It is easy to be negative. Trying to see something positive is hard. I think of it this way: The minister could have done nothing… that would be even easier, and even less people would have noticed.

[Sarel.Wagner]

Sure thing, there is a reason this was done, convinced about it. Someone in the party went looking into this, and came to the conclusion, this amendment and exclusion is the lesser of the evils, so the minister was told, and Eskom knows. Should put that nicely in perspective…

Groetnis

[plonkster]

@Sarel.Wagner

there is a reason this was done

Oh I agree with that. I think the main reason is to get the annual report out the door, and I think @Village_Idiot is correct that this is most likely for accounting purposes.

But in the same breath, I have no doubt that it opens secondary possibilities, and that those absolutely will be exploited. Never let a good crisis go to waste, as they say.

[Robert]

Andre HAD to go…

[TheTerribleTriplet]

Eskom fights to block town from using its own solar power

Eskom and representatives from the Free State town Frankfort are set to meet in the Johannesburg High Court this week over a dispute about load-shedding schedules, reports Rapport.

Mafube municipality’s business forum and private power distributor Rural Maintenance approached the court to preserve the status quo until the dispute can be resolved with energy regulator Nersa.

At the heart of the dispute is that Eskom threatens to block Rural Maintenance from setting reduced load-shedding schedules, despite procuring additional solar power for Frankfort.

Rural Maintenance buys electricity from four solar farms in the area at a lower tariff than Eskom charges and supplies it to the Mafube municipality.

According to the report, Rural Maintenance holds a 50% stake in the community-run solar farms. The rest is owned by twenty farmers and businesses in the area.

And in Cpt …

Cape Town’s big plan to stop load shedding is coming this week

On 29 March, Hill-Lewis announced the city’s budget, which included a R2.3 billion plan to end load shedding:

• R220 million to buy power from the open market
• R288 for the Power Heroes voluntary energy savings incentive scheme
• R53 million in ‘cash for power’ payments for solar power from residents and businesses
• R640 million on city-owned solar plants
• R50 million in battery storage
• R1 billion to operate Steenbras Hydro Pumped Storage Scheme.

What a contrast.

[Sarel.Wagner]

On this exemption of Eskom: https://dailyfriend.co.za/2023/04/04/how-they-made-eskom-corruption-vanish/

But do read the article, very very insightful. The crux is at the bottom of this extrac:
It reported irregular expenditure as on 31 March 2022 of R67.1 billion, fruitless and wasteful expenditure of R5 billion, and losses due to criminal conduct of R2.8 billion.

Puff of smoke

Eskom will be happy to learn that none of this is more than a technicality in the eyes of the electricity minister. Just to make sure, however, finance minister Enoch Godongwana also sprang to Eskom’s rescue.

A Gazetted notice over his signature dated 31 March 2023 says that for the next three financial years, Eskom will be exempt from the section of the PFMA and the Treasury Regulation which require it to include in its annual reports particulars of ‘any material losses through criminal conduct and any irregular expenditure and fruitless and wasteful expenditure that occurred during the financial year’.

This notice – unlike a similar notice issued to exempt Transnet from the same provisions exactly a year earlier – appears to exclude ‘material losses through criminal conduct’ from Eskom’s exemption.

And so, as if by magic, all the corruption, fraud and theft at Eskom vanished in a puff of smoke.

Not two weeks ago, Eskom’s board chairperson, Mpho Makwana, assured us the company was ‘proactively dealing with Fraud and Corruption’.

He’ll be pleased to hear that he can stand down.

The reason Godongwana claims to have suspended Eskom’s obligation to comply with the PFMA, according to a letter to Makwana leaked to News24 (paywalled), is because the ‘shocking lack of financial controls’ at Eskom might cause qualified audit findings, which could put Eskom’s credit rating at risk.

See no evil

The strategy of the ministers in charge of Eskom is simple, and they learnt it from Mizaru, Kikazaru, and Iwazaru, who see no evil, hear no evil, and speak no evil.

Apparently, they expect ratings agencies and bondholders to either not notice their clever stratagem, or to go along with it on the basis that if Eskom does not have to report negative news, everything is hunky-dory, and its credit rating can remain intact.

KultuurGroetnis

[Richard_Mackay]

Forgive me but what is ‘dispatchable energy’? (perhaps not ‘virtual’??)
PS: I’m aiming to get some of that R53 million feeding back to the grid

[mmaritz]

@Richard_Mackay

dispatchable energy

Dispatchable source of electricity - Energy Education.

[Sarel.Wagner]

Dispatchable means effectively 24hours available. Nuclear is, so is Coal plant. Hydroelectric in the short term can be. Solar and Wind are not, only available when the Sun shines (without BESS) and Wind is also not reliable in that sense.

Solar and Wind combined with Battery Storage (BESS) can be dispatchble, if the BESS is big enough. If the BESS can provide rated capacity for 4 hours, and is fully charged at or before sunset, the Solar/Wind is considered dispachable for another 4 hours.

This is a very simplified view.
Groetnis

[TheTerribleTriplet]

I must say, I NEVER thought the ANC would make this move, “See No Evil”.

We are heading towards elections, the chances are they would be ousted according to various opinions.

So maybe it all can be reversed if they are not in control.

But then I read last night, John Steenhuisen, re-elected, will make deals with the ANC to keep the EFF out, to not have an ANC/EFF coalition:
https://www.capetalk.co.za/articles/468162/could-an-anc-coalition-government-be-our-country-s-political-future

Whichever way, “Eskom … is there ANY chance?” = Unlikely.

Will see what the international investors in and around Eskom do with this info.

EDIT: I get the impression there are going to be a court case, even maybe cases, in and around this thing.

[plonkster]

@Richard_Mackay

dispatchable energy

It’s basically energy that can come online very quickly, within seconds or minutes. Think of it as picking up a phone (which is exactly how it worked in the old days!), calling Palmiet pumped storage, and asking for a certain amount of megawatts.

Battery storage can be considered “dispatchable”, because it can come online in seconds.

[plonkster]

@TheTerribleTriplet

will make deals with the ANC to keep the EFF out, to not have an ANC/EFF coalition

I’ve said this a few times. Don’t think an ANC+DA coalition cannot happen. If that idea makes you sad, vote for someone else. I would take a ANC+DA coalition over an ANC+EFF coalition every day. Make no mistake, both will be dysfunctional and frustrating to deal with, but the latter will be several orders more of that.

[Sarel.Wagner]

@TheTerribleTriplet

Will see what the international investors in and around Eskom do with this info.

Me thinks, they don’t want them to know the extent of the corruption, hence removing it from the financials…

GeldGroetnis

[plonkster]

Eskom tweeted something about that this morning.

The exemption allows them to not report it in the financial reports. They still have to report it in the Annual report, and that report still goes to parliament.

They pretty say outright that this allows PFMA compliance, which should help with lending, credit ratings, and stakeholders.

I don’t think it is going to work. And while I believe the motivation is perhaps “pure” (for some value of pure), I lament two things, 1) that it cuts them slack they don’t deserve, and 2) that throwing in 2024/25 as well does not bode well.

[mmaritz]

@plonkster

2024/25 as well does not bode well.

[Village_Idiot]

@Sarel.Wagner

But do read the article, very very insightful. The crux is at the bottom of this extrac:
It reported irregular expenditure as on 31 March 2022 of R67.1 billion, fruitless and wasteful expenditure of R5 billion, and losses due to criminal conduct of R2.8 billion.

there is some degree of irony in the author quoting from the annual report and not the financial statements - the PFMA info will not be incorporated as part of the next couple of financial statements but must still be in the annual report. So I do not get the “made Eskom corruption vanish” claim.

[Village_Idiot]

@plonkster

I don’t think it is going to work. And while I believe the motivation is perhaps “pure” (for some value of pure), I lament two things, 1) that it cuts them slack they don’t deserve, and 2) that throwing in 2024/25 as well does not bode well.

Not sure slack is really being cut.

Keep in mind that the reporting requirements on the financials include all inherited irregularities that may never be resolved due to things like destruction of documents during the peak of the zupta years - so Eskom will sit with qualified audits no matter what they do in the new year. The term “irregular” has now become synonymous with “criminal/corruption” but not all of it is and again to sort that out to the satisfaction of auditors will likely not happen in 12 months - if ever.

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Overall I suspect some motivation for the exemption might also have to do with trying to avoid lenders invoking clauses that enable them to demand immediate repayment of debt.
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looking at Transnet

2021

2022

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Will investors/lenders fall for this trickery? No idea but ratings agencies potentially put some value on qualified audits
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