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ANC sleeping with enemy - opposition

By Anna Majavu and Olebogeng Molatlhwa | Jan 22, 2010 | COMMENTS [ 0 ]

A POLITICAL storm is brewing over the ANC's business involvement with electricity utility Eskom.

The ANC investment arm, Chancellor House, is involved in a deal to build boilers for Eskom, and opposition parties are accusing the ruling party of wanting to ride on the back of the South African public to make money out of Eskom's proposed 35 percent electricity price hike.

Chancellor House owns a 25percent stake in Hitachi Power Africa - a subsidiary of Japanese manufacturer Hitachi - which won a contract to supply boilers to two new coal-fired power stations, Kusile and Medupi.

Much of the electricity price increase revenue will be used to fund the building of the new power stations.

Opposition parties say this situation creates a conflict of interests.

The DA and UDM yesterday said the ANC was not participating in the public hearings held by the national electricity regulator to discuss the hike because Chancellor House was set to benefit.

DA MP Sejamothopo Motau yesterday said the ANC intended to make a private submission to Nersa.

"This is because, while the ANC says in public it is concerned about price hikes, behind closed doors it is in favour of them," said Motau.

"It is a preposterous situation," said UDM leader Bantu Holomisa.

ANC spokesperson Jackson Mthembu denied that the ANC secretly supported the proposed price hike.

"To say we are making a private submission is not accurate. We will engage Nersa and Eskom. When Eskom wanted a 45percent increase we engaged it and spoke our minds."

This week, ANC general secretary Gwede Mantashe defended Chancellor House's involvement in the Eskom deal, saying such deals helped the party to sustain itself and fund its activities.

Companies participating in the Nersa public hearings have warned of job losses should the tariff increase be approved.

Representatives from the Electricity Intensive Users Group (EIUG), Business Unity South Africa (Busa), Progress Ceramics, Smart Green Prosperity and the Displaced Rate Payers Association have all urged Eskom to seek alternative ways of raising the necessary funds or pursue stringent cost-effective methods.

Cosatu, on the other hand, said the government should tax the rich in order to generate the hefty R385billion needed for Eskom's expansion plans.

Cosatu spokesperson Patrick Craven said taxing high-income earners was "only right" because poor people could not afford such an increase, whereas their well-off counterparts could.

Eskom CEO and chairperson Mpho Makwana still insisted yesterday that a tariff increase was the only viable way to proceed because the country desperately needed a reliable source of electricity supply.

Cape Peninsula of Technology civil engineering lecturer Shaheed Mahomed told Sowetan that South Africa did not need two new power stations.

"One new wind farm built every year in any windy area would provide us with enough energy to meet our growing needs," Mahomed said.


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