Thursday, April three, 2008

From Creamer Media in Johannesburg, I'm Shannon O'Donnell.

Making headlines today:

State-owned electricity producer Eskom issued a shocking warning on Wednesday that it could be forced to cut back or even halt certain of its projects if it was unable to secure adequate revenues, which could only be achieved through a substantial increase in electricity tariffs, or material shareholder support.

The utility had requested that the National Energy Regulator of South Africa revise upwards the 14,2% tariff increase, which came into force on April 1, to 60%, in a bid to close the ever increasing gap between its rising operational costs and prevailing tariffs.

This suggestion had received an icy reception from the South African public at large, which was already reeling from the negative effects of ongoing load shedding.

Eskom Chief Operating Officer Brian Dames
(audio clip)

Meanwhile, Eskom would seek to "narrow" its coal specifications to the top end of its quality spectrum, in a bid to improve the operation of its coal fleet and limit load losses, which had been at the heart of recent supply-side underperformance.

It was now common cause that, while the utility continued to receive coal within its specified quality band, this supply had tended to migrate to the bottom end of a template that measures energy content, material abrasiveness, and acceptable levels of fine material.

This reduced quality, together with low levels of stock and unplanned events, such as boiler-tube leaks, had led to massive load losses and disruptions. In fact, at times, up to 25% of Eskom's generation capacity was simply unavailable, forcing the utility to deploy an unpopular load-shedding regime.

Eskom Chief Operating Officer Brian Dames
(audio clip)

South Africa's Department of Minerals and Energy had terminated a R5-billion contract with a consortium led by US power producer AES to build two open cycle gas turbines, the Business Day reported today.

The leading financial daily revealed that the DME's decision had emerged, owing to the fact that the AES Corporation could not meet its obligations.

News of the termination came only a day after State-owned power utility Eskom said that it welcomed independent power producer participation, and that it was still optimistic that the AES facilities could be added to the grid by 2010.

Also making headlines today:

Input cost rises to drive up steel prices, says Lakshmi Mittal
Loss of public confidence likely to be bonus consideration, says Eskom chief
Now or never for trade deal, says World Bank's Zoellick
ArcelorMittal sees coal price rising 150% to 200%
Gold moves above $900 an ounce, further recovery mooted
And, the DME grants Eastplats new-order mining right

In political news:

Mugabe loses control of Zimbabwe parliament
Zambia security forces on alert over Zimbabwe
Accusations fly as Kenya's political deadlock deepens
And, Egypt criminalises protests in places of worship

That's a round up of news making headlines today. For more on these and other stories, visit engineeringnews.co.za, miningweekly.com and polity.org.za

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