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Thread: BUSA and Eskom

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    Platinum Member sterne.law@gmail.com's Avatar
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    BUSA and Eskom

    This mornings news tells us that BUSA says the proposed 35% ESKOM hike will affect growth by 1%. We all know that such an increase will have dramatic effect. Surely we need to be looking at alternative suggestions. We know government cant or wont think of logical business based solutions, so i guess we need to do it for them

    Surely the one way is to allow private investors to fund the investment in return for a shareholding or in the form of debenture. Investing in any monopoly and one that is a neccessity at that, will always be popular. In turn the investors or a consortium get to appoint board members and management to protect their investment. This way Eskom gets funding, the nation is spared excessive increases and the Parasatal now has to perform and provide answers as their are investors who want to look after their investment. Seems pretty easy to me. Of course the sticking point is having to answer to someone and be responsible
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Diamond Member tec0's Avatar
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    Well, let us just say “what is reasonable” when it comes to electricity and a monopoly system that is evidently the case. Still the truth is alternative power, you know it and I know it. I know that several large companies are looking to build their own power stations for basic private use.

    Now sadly privately owned nuclear power-plants are not a possibility because it gets regulated by guess who? So what do we do...?

    The worst thing we can do is to allow other companies and investors to control our power-stations. It is just bad business because you will end up paying them and MORE money goes out of the country. Don’t belief me then just look at our mining companies and the billions that are consumed by external investors. So I say think happy thoughts and pay the 35% increase.

    Yes it is a lot of money, I know but if corruption can be eliminated and our government becomes stronger then we will have the money we need to rebuild our country... Thus more work for us. That is the truth of the situation. Like it or don’t like it... I personally think that other opportunities can now be explored and refined.

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    Moderator IanF's Avatar
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    I looked through some of the ESKOM submissions and could not find a cash flow model or an IRR calculation for the funding required. Has anyone seen this from them as there submission looks like a nice write up with no backing to it.
    Only stress when you can change the outcome!

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    Platinum Member sterne.law@gmail.com's Avatar
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    Quote Originally Posted by tec0 View Post
    Well, let us just say “what is reasonable” when it comes to electricity and a monopoly system that is evidently the case. Still the truth is alternative power, you know it and I know it. I know that several large companies are looking to build their own power stations for basic private use.

    Now sadly privately owned nuclear power-plants are not a possibility because it gets regulated by guess who? So what do we do...?

    The worst thing we can do is to allow other companies and investors to control our power-stations. It is just bad business because you will end up paying them and MORE money goes out of the country. Don’t belief me then just look at our mining companies and the billions that are consumed by external investors. So I say think happy thoughts and pay the 35% increase.

    Yes it is a lot of money, I know but if corruption can be eliminated and our government becomes stronger then we will have the money we need to rebuild our country... Thus more work for us. That is the truth of the situation. Like it or don’t like it... I personally think that other opportunities can now be explored and refined.
    I dont propose that ESKOM is privatised, merely that a secion is owned by business and thus a joint venture takes place with mutual benefit
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Platinum Member sterne.law@gmail.com's Avatar
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    Quote Originally Posted by IanF View Post
    I looked through some of the ESKOM submissions and could not find a cash flow model or an IRR calculation for the funding required. Has anyone seen this from them as there submission looks like a nice write up with no backing to it.
    Well the fact that they merely went from 45% to 35% indicates a thumb suck approach does it not?
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Site Caretaker Dave A's Avatar
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    There is one aspect I think should be looked at very closely - coal deposit mining rights. I believe there is a queue of connecteds trying to snap these up and I suggest they shouldn't be given to private individuals or consortiums. ESKOM should be given the rights on the coal deposits they need.

    Extraction could be outsourced on contract, but ESKOM needs to be able to control their own resources, and it is in government (and our) interest to make sure that's exactly what happens.

    And this business of paying spot price for coal is an absolute no-no. The CEO responsible for the introduction of this little horror should have been fired on the spot for that little stunt alone. There should be long term contracts in place at preferential rates (certainly well-below an international standard spot-price benchmark) due to the stability of the contract.

    The expansion projects need to be properly financed for assets of this class. If the plant has a 30 year lifespan, the financing model should be built around that. In fairness, ESKOM probably intended to do that - it was the GFM that pricked that bubble. But adjust the timetable of the expansion project to suit then.
    The trouble with opportunity is it normally comes dressed up as work.

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    Diamond Member tec0's Avatar
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    Eskom needs a few things to change... but the one thing I will always demand is nuclear power. Face it what are we going to do when the coal deposits run out? With an estimated 30 year supply I would say that Eskom must be stupid to consider coal-powered generation.

    The truth is nuclear power has gone a long way to perfect its technology and is at this point in time really safe and stable. Yes the upkeep will cost a hell of a lot more but it is sustainable and if driven correctly it can be a safe alternative.

    But if you think that heavy industry can run on wind power then so be it... I am not going to argue. Still the question is there; what is Eskom doing for a long-term solution? The answer is nothing. Nothing at all... So we are facing a lights out scenario and ethical thinking must be introduced but again when you look at Eskom’s management structure and other more alarming factors such a job creation all pointers are indicating that Eskom is in it for the money...

    The fact is that if there is no forward thinking, so even if we get investors and somehow figure out how to pay the 35% increase there is no solutions so the money that is given to Eskom in my mind will be a waste.

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