Eskom financial data shock: Compliance expert says consumers overcharged R1,3 trillion in 15 years

Financial compliance expert Paul Nel says South African consumers of electricity have been overcharged by R1.375 trillion in electricity tariffs over the past 15 years. He believes this has contributed to South Africa's failing municipalities. Nel, the Director of Prisma CRRM, which specialises in financial compliance of large operational, capital expenditure, and infrastructure projects says this conclusion is drawn from analysis of Eskom's Annual Financial Statements from 2008 to 2023..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Watch here.Relevant timestamps from the interview.00:00 – Introduction00:27 – Eskom annual statements03:17 – The R2tril didn't generate more electricity04:38 – When did the ANC drop the bomb06:03 -Example of wasteful expenditure11:28 – How can these billions be recovered?16:33 – Conclusion.Listen here.Highlight from the interview.Financial compliance expert Paul Nel says South African consumers of electricity have been overcharged by R1.375 trillion in electricity tariffs over the past 15 years. He believes this has contributed to South Africa's failing municipalities..Nel, the Director of Prisma CRRM, which specialises in financial compliance of large operational, capital expenditure, and infrastructure projects says this conclusion is drawn from analysis of Eskom's Annual Financial Statements from 2008 to 2023..His key findings are:.___STEADY_PAYWALL___.Eskom's electricity sales increases were much higher than Consumer Price Index (CPI) increases over those 15 years. He has quantified that as a result consumers during the period were overcharged by R1.375 trillion in electricity tariffs;Despite this, Eskom's borrowings rose by R373.3 billion and government's equity increased R241.6 billion;In total, Eskom received R1,989 trillion extra in real terms through revenue from sales, additional debt, and the State over the 15-year period – despite selling less units of electricity over the same period. .Nel says it is clear electricity consumers have received little value for this additional R2 trillion they gave the State monopoly. What they did receive, instead, was "a lot of load shedding, unreliable power"..He believes this has contributed to unaffordable and collapsing public and municipal services and infrastructure; lack of private sector investment and high unemployment. .The reason we have failed municipalities is exactly because they do not keep their tariff increases in line with inflation, he says..Nel points out that despite the fact that Eskom once produced the cheapest electricity in the world and in 1990 provided over half of Africa's electricity – even winning 2001's power company of the year award at the Global Energy Awards – it has been "ruined and bankrupted" by the African National Congress government. He says financial data proves the ANC sacrificed the once proud organisation "for the benefit of BEE – Black Elite Enrichment; corruption and poor ideological policies". .According to Nel, the ANC government dropped the ball in 2005 when the National Energy Regulator of South Africa (NERSA) was established – especially when it started to allow higher than CPI in electricity tariffs in 2009..He slams NERSA for not investigating Eskom's "theft and poor governance" sufficiently..And he says The Department of Energy and NERSA "failed" dismally" to ensure that South Africa invested optimally and timely in the best energy sources in the short-, medium-, and long term..Nel shares examples of irregular, fruitless and wasteful expenditure – and calls for further investigations to ensure all guilty parties are held legally responsible to recover all Eskom payments not in compliance with legislation and Eskom contracts..Here is a PDF of his report:.Download PDFLetter-to-media-Eskom-squandered-R2-trillion-15-01-2024Download.Read also:.Eskom's new Homeflex tariff: How to save and what's the catch?Eskom warns to expect an even darker 2024 after South Africa's worst year of load-shedding in 2023Eskom pulls the plug on Karpowership: Big setback in South Africa's power push

Eskom financial data shock: Compliance expert says consumers overcharged R1,3 trillion in 15 years

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