Voorsitter, agb Minister, Adjunkministers, lede en gaste ... [Chairperson, hon Minister, Deputy Ministers, members and guests ...]
One of the objectives of the department is to ensure a well-managed, effective, safe and cost-effective electricity industry. An effective electricity industry is clearly one of the cornerstones of a growing and successful nation. We in South Africa cannot afford to have the same energy crisis as we had at the beginning of 2008. We think it is necessary for this department to see whether Eskom is fulfilling its mandate on cost- effectiveness. They have recently applied for an interim 34% increase, and it is expected that they will apply for another increase of about 52% later this year.
We should consider the following aspects on how Eskom is being operated: Eerstens, die primre energiekoste, hoofsaaklik steenkool se koste, styg met R7,32 miljard. [Firstly, the primary energy costs, mainly the cost of coal, increases by R7,32 billion.]
Let me give you an example of how Eskom manages its coal stocks. Eighty thousand tons of coal at Arnot Power Station went missing. This was written off through a journal entry. No investigation was undertaken and no one was held accountable.
Twee honderd agt-en-sewentig duisend ton steenkool het weggeraak by Kriel. Niemand is verantwoordelik gehou nie. Eskom laat toe vir 'n verskil van 2% in die gewig van steenkool gelaai en gelewer. As ons dit toepas op die 9 miljoen ton gelewer by Majuba teen R70 per ton, het Eskom R6,3 miljoen te veel vir onafgelewerde steenkool by een kragsentrale betaal. (Translation of Afrikaans paragraph follows.)
[Two hundred and seventy-eight thousand tons of coal have vanished at Kriel. No one was held responsible. Eskom allows a difference of 2% of the weight of coal that was loaded and delivered. If we apply this principle to nine million tons delivered at Majuba at R70 a ton, then Eskom paid R6,3 million for undelivered coal at one power station.]
At another power station, Eskom lost 400 000 tons of coal last year. This is about one soccer field of coal, 50 metres high. If this was bought under the so-called "emergency mandate" of R250 a ton, this alone was a loss of about R100 million.
Tweedens, ons moet kyk na die oorbetaling van R120 miljoen aan 'n subkontrakteur vir steenkool wat nooit afgelewer is nie. [Secondly, we must look at the payment of R120 million to a sub-contractor for coal that was never delivered.]
There is upfront assistance to suppliers to help them deliver coal up to R294 million. Why have collieries like Optimum short-delivered up to three million tons of coal in their contract in the last few years but are offering excess coal to Eskom at 40% to 50% higher than contract prices? Several of the tied collieries are producing 20% to 50% below the current burn rates of power stations. Therefore, the shifting of coal between power stations is costing between R60 million and R150 million per month. We also need to look at why 20% of coal on short-term contracts cost about 50% of Eskom's total coal costs.
In conclusion, hon Minister, what is this department doing to urgently investigate Eskom's ability to run itself effectively and to provide this country with cost-effective energy according to its mandate? Don't let the consumer pay for what, to a large extent, is a management problem. Thank you. [Applause.]