http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.35Change: -0.06
R/$ = 12.15Change: 0.01
Au 1189.85 $/ozChange: 1.35
Pt 1113.50 $/ozChange: -2.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Apr 17, 2009

Eskom's capex programme to peak at R104bn in 2010/11

Back
Africa|CoAL|Environment|Eskom|Mining|PROJECT|Projects|Storage|Sustainable|transport|Africa|Energy|Maintenance|Infrastructure|Power|Operations
Africa|CoAL|Environment|Eskom|Mining|PROJECT|Projects|Storage|Sustainable|transport|Africa|Energy|Maintenance|Infrastructure|Power|Operations
africa-company|coal|environment|eskom|mining|project|projects|storage|sustainable|transport|africa|energy|maintenance|infrastructure|power|operations
© Reuse this



South African power utility Eskom would spend about R87-billion during 2009/10 and expects its capital spending to peak at nearly R104-billion in 2010/11, before retreating to around R84-billion in 2011/12.

Therefore, CEO Jacob Maroga argued recently that its build programme was effectively a ready-made stimulus package, which could help South Africa in militating against the worst effects of the global economic crisis.

In dollar terms, its programme to build two new coal-fired power stations, as well as a pumped-storage peaking plant in the Drakensberg, is worth $23-billion - only $2-billion short of what China spent on the giant Three Gorges Dam project, which was currently ramping up its hydroelectric capacity.

The three projects, Medupi, Kusile and Ingula, would not only add nearly 11 000-MW of generation capacity, but would also stimulate investment into related transport, mining and transmission infrastructure. Further, it would support the development of new communities as well as social facilities such as houses, hospitals and schools.

But speaking at the Gordon Institute of Business Science earlier this month, Maroga indicated that this expenditure programme would place strain on the company's financial ratios

Therefore, he hinted to the possibility that it might have to approach government for yet more support beyond the R60-billion subordinated loan and the R176-billion in guarantees already extended to help it finance its R385-billion, five-year capital programme.

"Government has given us a guarantee . . . but we may require more," he said.

He added that part of the reason for the delay in its formal tariff application, lay in its desire to present not only a request for a price adjustment, but also an integrated funding blueprint.

The delay in approaching the National Energy Regulator of South Africa (Nersa) was also a consequence of the "fundamentally" changed environment for infrastructure funding, in light of the economic meltdown.

Maroga that the application would be informed by an "integrated funding model" that ensured a sustainable business for both current operations and the build programme.

However, given the substantial delay in Eskom's submission, which was initially expected late last year, the tariff adjustment would also be delayed.

There was already concern about the prospect of a material spike beyond the nominal increase granted, should Nersa allow Eskom to recover the full increase in the remaining months once the determination is finally made.

Maroga also did not comment on whether the tariff request would be confined to covering rising operational costs as has been suggested, conceding only that these cost had increased considerably.

Short-term coal contracts, which were entered into last year to replenish depleted stockpiles, were the major contributors to surging costs. But Maroga said that maintenance; employee and other running costs had also escalated over the year.

He reported that the group had spent a record R46-billion on capital projects during its 2008/9 financial year, which ended on March 31.

Should the utility refrain from seeking to secure additional funding for its build programme from the consumer, the prospect of it turning to government for more support would certainly increase.

Resorting to either the consumer or the taxpayer for the additional capital was likely to lead to significant opposition either way.

South Africa's largest labour federation, the Congress of South African Trade Unions (Cosatu), had already stated that it would strongly oppose even an increase that was in line with Nersa's previously indicated price path of between 20% and 25%.

In fact, Cosatu warned that it would again call for a national protest action by its members if Nersa allowed an "excessive" increase.

Edited by: Martin Zhuwakinyu
Creamer Media Senior Deputy Editor
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other News This Week News
While strongly welcoming the promulgation of the new Part 101 of South Africa’s civil aviation regulations, governing the commercial operation of civil remotely piloted aircraft (RPAs) in South Africa, the Commercial Unmanned Aircraft Association of Southern Africa...
LSM Distributors has contracted engineering consultancy WSP | Parsons Brinckerhoff Africa to undertake the R100-million restoration of the 54-year-old Kyalami racetrack, situated in Midrand. The restoration will assist in re-establishing it as a venue for...
South African Defence Minister Nosiviwe Mapisa-Nqakula has expressed the hope that the defence budget will be significantly increased over the next five years. She did so while addressing the media in her recent budget vote media briefing. The 2015/2016 defence...
More
 
 
Latest News
All grades of petrol will increase by 47c/ℓ on Wednesday, the Department of Energy announced on Friday. The reef price for unleaded 93 and LRP petrol was currently standing at R12.61/ℓ, while unleaded 95 cost R12.89/ℓ.
JSE-listed Tower Property Fund has acquired the Link Hills Shopping Centre, in Waterfall, KwaZulu-Natal for R160.9-million from The Sabre Trust and Matlu Family Trust. The shopping centre, on Inanda Road, was situated in an upper-high-growth residential area, next to...
South Africa recorded a trade deficit of R2.51-billion ($207-million) in April from a revised shortfall of R9-million in March, data from the revenue agency showed on Friday. Exports fell by 7.5% to R84-billion, while imports were down 4.8% to R86.5-billion on a...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
While strongly welcoming the promulgation of the new Part 101 of South Africa’s civil aviation regulations, governing the commercial operation of civil remotely piloted aircraft (RPAs) in South Africa, the Commercial Unmanned Aircraft Association of Southern Africa...
LSM Distributors has contracted engineering consultancy WSP | Parsons Brinckerhoff Africa to undertake the R100-million restoration of the 54-year-old Kyalami racetrack, situated in Midrand. The restoration will assist in re-establishing it as a venue for...
South African Defence Minister Nosiviwe Mapisa-Nqakula has expressed the hope that the defence budget will be significantly increased over the next five years. She did so while addressing the media in her recent budget vote media briefing. The 2015/2016 defence...
The African Development Bank (AfDB) has been an implementing agency for the Global Environment Facility (GEF) since 2008. The relatively young portfolio has 28 projects over 30 countries on the continent according to the 2014 AfDB and GEF annual report released...
PAUL SPEAR Training and development should be an integral and proportionate part of the long-term strategy of all companies, regardless of their size
Investment in South African youth through apprenticeships and learnerships will not only create direct benefits for businesses but will also contribute significantly to job creation and socioeconomic transformation in the country.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96