4.5 Responses from Eskom In response, the Group CEO responded as follows: . The financial support received from the state was sufficient and the entity would be able to raise the remaining funds through loans. Eskom had not planned what needed to be built beyond Kusile, hence it would be unable to determine the funding requirement beyond seven years. . The shareholder had stressed that Eskom should not be rigid with the balance sheet, but should be flexible to enter into equity partnerships in order to alleviate the pressure on government on future build projects. . Eskom could not be solely responsible for the introduction of Independent Power Producers (IPPs). They charged Eskom 80c per unit, and Eskom sold electricity at 40c per unit. There were programmes that had been initiated by the Department of Energy to introduce IPPs. Four of the six projects in regard to IPPs were operational. . Eskom supplied half the residential customers directly. The challenge was with regard to the backlog of infrastructure in the municipalities. . The Free State had one municipality that had not paid Eskom, and arrangements have been made to settle the debt. The problem with repayments by municipalities was cyclical and was due to the inability of municipalities to collect revenue. . Eskom conceded that the prices of electricity had adverse effects on local industries, but comparatively India and China were very competitive markets, hence the cost of power stations were lower than Medupi. . There were no special prices for customers who were receiving electricity directly from Eskom. . Poor quality coal caused damage to the plant and resulted in high maintenance costs. Eskom has tightened coal specifications with suppliers, and coal that did not satisfy specifications would not be loaded. There was a need for more investment in coal mines. . There was a problem with the boiler contractor not achieving targets as expected, but Eskom was working with the contractors to ensure that the targets were met timeously. . Big companies stole the highest volumes of electricity. . In terms of visibility, Eskom's leadership had visited and met with premiers, mayors, communities and NGOs. Eskom had a programme that made management accessible to employees at branch level. . Eskom had concluded negotiations on special priced contractors, and the only one outstanding was the Bayside contract. . Eskom was not funding the rural electrification programme. The Department of Energy was the one that decided which areas needed to be electrified, while Eskom was only an agent. . Eskom had no intention of approaching international financial markets in the short term.