Eskom's profits off, but lights stay on
JOHANNESBURG - Electricity parastatal Eskom's net profit dropped to R5.2 billion at the end of March this year, from R13.2bn the previous financial year, CEO Brian Dames said on Wednesday.
A 12 percent increase in revenue to R128.9 billion was offset by escalating operating expenditure due to an increase in energy costs, he said in Johannesburg.
However, Eskom had been able to secure 82.9 percent of its R300 billion funding requirements.
Meanwhile, Eskom has assured South Africans they will not experience power cuts, similar to those in 2008, because of problems at the Medupi power plant, SABC news reported on Wednesday.
"For the last... five years we have kept the lights on. South Africa has seen no load-shedding," Dames said in Johannesburg.
"We are busy building, on our side, the new projects and we are busy running our current fleet and maintaining that. We are confident that we will keep the lights on."
However, Eskom said on Monday that one of Medupi's six 800MW units would not meet its deadline to deliver power to the grid by the end of the year because of technical problems.
In his report for the year, Dames said contractor performance and labour unrest had added significant risk to the company's ability to deliver power.
"A more realistic target for the first synchronisation of unit six to the grid is the second half of 2014," the parastatal said in a statement at the time.
Construction was behind schedule at the Kusile coal-fired plant in Mpumalanga, and at the Ingula pumped-storage scheme in the escarpment of the Little Drakensberg range straddling the border of the Free State and KwaZulu-Natal.
Kusile was only 22 percent complete, reflecting the suspension of the project during the 2009/2010 financial year due to funding uncertainty.
Ingula was 68 percent complete. Ingula and Kusile were due to start delivering first power to the grid in the 2014/2015 financial year, he said.
"While the use of coal as a primary energy source will decline as South Africa gradually reduces its reliance on fossil fuels, we will need a reliable supply of coal of an acceptable quality for many years to come," Dames said.
About 85 percent of Eskom's generating capacity was produced by coal-fired plants.
In the reporting year, Eskom contracted 1.1GW from independent power producers to the grid.
Of the R4.3 billion contract values awarded in the 2012/2013 financial year for the capacity expansion programme, R3.4 billion went to local contractors and suppliers, exceeding government's 52 percent target.