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Eskom's R1,3trillion plan

By unknown | Feb 15, 2008 | COMMENTS [ 0 ]

Joel Avni

Joel Avni

Eskom has embarked on one of the world's biggest programmes to build power stations, chief executive Jacob Maroga said yesterday.

That's the good news. The bad news is that the company will spend R1,3 trillion on capital expenditure by 2024 and someone will have to foot the bill.

Electricity prices will double or triple in the next five years and the government, Eskom's sole shareholder, will almost certainly have to pick up a significant chunk of the cost. And the massive expansion could not have come at a worse time.

Heavy equipment such as turbines and boilers rocketed 30percent in price around the world over the last year as the few engineering firms that make them struggle to cope with demand.

It takes up to 10 years to plan, design and build a power plant and South Africa will not be out of the woods until 2016.

So the lifestyle afforded by an ample supply of the world's cheapest electricity will have to be curtailed as the supply crisis hits every South African.

Platinum and aluminium prices surged to record highs yesterday as markets reacted to South Africa's cutbacks.

But even as Eskom entreats customers to cut their demand by at least 10percent, it is proceeding apace with rural electrification. Maroga said the plan to provide universal access to electricity by 2012 remained intact.


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