[DEBATE] : (Fwd) Energy maintenance crisis

[Patrick Bond]

(My info had been that REDS were not going to happen. I guess that needs 
rethinking. I also am under the impression that in addition to 
underfunding, systematic non-maintenance is another of the malincentives 
associated with Eskom's managerial bonuses: if they didn't report 
problems, the lads would get higher end-of-year bonsalas. So this 
backlog may reflect a bunch of maintenance orders that simply went into 
the bottom desk drawer.)

Maintaining grid is shockingly expensive  

June 09 2008 at 02:04PM  
http://www.iol.co.za/index.php?set_id=1&click_id=13&art_id=nw20080609130
647716C635007

Electricity authorities called for action on Monday to deal with a
R25-billion maintenance backlog that could further stifle economic
growth.

"On the basis of an analysis that was recently conducted, the current
electrical infrastructure maintenance and refurbishment backlog is
estimated to cost R25,7-billion," Amos Masondo, chairman of the SA Local
Government Association, told an electricity distribution maintenance
summit in Johannesburg.

"Restoring the integrity of distribution networks throughout South
Africa to an acceptable level seems to be a mammoth task," he added.

Minerals and Energy Minister Buyelwa Sonjica told delegates the
government invested some R1,8-billion annually into new electricity
distribution infrastructure but little money was injected into
maintenance.

"There are limited funds directed to the maintenance and refurbishment
of the old electricity distribution infrastructure," Sonjica said at the
two-day summit that ends on Tuesday. "The lack of maintenance and
refurbishment of the electricity distribution infrastructure poses a
threat to our economy."

South Africa posted a growth rate of only 2,1 percent in the first
quarter of this year, compared to 5,3 percent in the fourth quarter of
last year, partly due to rolling electricity blackouts, economists said.

"The upcoming 2010 Fifa Soccer World Cup and the rapid economic growth
of the country demand more improvement on the capacity of the
electricity distribution infrastructure," Sonjica added.

The summit is expected to discuss the implementation of Regional
Electricity Distributors (Reds) which would take over the function of
power distribution from municipalities.

This would mean that consumers would pay their electricity bills to the
Reds and not to municipalities. That would imply a loss of revenue to
municipalities.

The Reds are to be established as public entities under the auspices of
the Electricity Distribution Industry (EDI) Holdings. Cabinet approved
the proposal to create six Reds in October 2006 but it is yet to be
implemented. The proposal said Eskom and the municipalities would become
shareholders in Reds but that Eskom's shareholding should be reduced
over time.

Masondo said the Reds would "assist in addressing the network
maintenance backlog and promote equal treatment of consumers countrywide
through a national electricity pricing system".

But Deputy President Phumzile Mlambo-Ngcuka told delegates there was
"resistance in implementing EDI". "There are mechanisms in place to
ensure that municipalities and Eskom would not lose out," she said. "We
are shooting ourselves in the foot," said Mlambo-Ngcuka, urging
delegates to embrace the concept.

"The regional electricity distributors will help in facilitating the
upgrading of skills, sharing of expertise within the region, as well as
investment in and refurbishment of the electricity infrastructure in a
more coordinated manner," added Sonjica. - Sapa