Just as electricity consumers are about to release a sigh of relief after surviving a winter with only one week of interrupted power, news has surfaced of Eskom facing yet another disastrous coal shortage.

Eskom

“The new Eskom board was appointed in January 2018 and one would have hoped that by now they would have identified how coal procurement has been captured” states Ted Blom, a partner at Mining & Energy Advisors and the Energy Expert Coalition.

What the public has probably forgotten is the Coal Taskforce, of which Blom was a part of in 2007, identified that Eskom would face a coal cliff by 2015. In response, Brian Dames – Eskom’s head of generation at the time – publically announced an immediate commitment to establish at minimum 40 new coal mines. Now, more than 10 years after the announcement, not a single new Eskom-tied coal mine has been opened.

Eskom’s declared emergency plan to truck in Waterberg coal defies all industry logic and exposes how far removed the board is from reality. “This is the sort of mess you can expect when inexperienced persons are appointed to the board of what is probably the most strategically complex company to manage in SA” states Blom.

A further concern is the appointment of an overseas consultancy to devise Eskom’s future strategy. “Without experience in Eskom’s past successful strategies prior to 2001, this consultancy has zero chance of coming up with a viable future business plan,” states Blom. Prior experience would have recognised that Eskom had McKinsey and PWC consultants on hire fulltime since 2005 to develop “turnaround strategies”. Despite costing an exorbitant amount of money, none appear to have been effective in much other than leaving a mess behind.

Blom notes an increasing concern that Eskom is plainly deteriorating in front of our eyes and predicts the remnant scraps will become totally dysfunctional and worthless, resulting in more load shedding before the end of this year.