Press Release: Eskom’s Secret Deal with Alcan: Refusal to Release Details

Press Release: Eskom’s Secret Deal with Alcan: Refusal to Release Details
Earthlife Africa Jhb—SECCP
20^th of February 2007

In mid-December 2007, Earthlife Africa sent a Promotion of Access to Information Act (PAIA) request to Eskom regarding the supply of electricity to Alcan’s planned Coega Aluminium Smelter. In particular, Earthlife Africa requested information regarding the price at which Eskom would sell electricity to Alcan, what the conditions of supply were, and if Alcan could sell on unused electricity.

To all of these queries, Eskom has refused to supply any details, citing confidentiality agreements and trade secrets. This is a complete and utter stonewall in response to legitimate questions concerning South Africa’s welfare and long-term energy supply.

Eskom in 100% owned by the South African State, and the electricity it produces is a public good. It is a public asset, and has a responsibility to ensure electricity for all citizens of this country. In terms of the deal set out with Alcan, Eskom will provide 1355MVA a year over 25 years. This is a significant amount of electricity, roughly half of what the entire city of Cape Town requires, and a significant commitment of total electricity supply to just one foreign company.

Surely then, given rolling blackouts and Eskom’s stated lack of capacity, it is in the public interest to know how much (or little) Alcan is getting its electricity for and what the conditions of supply are? For all we know, Alcan could be getting its electricity far below market cost and individual South Africans could be effectively subsidising the electricity usage of one of the world’s largest aluminium companies. In 2005, Alcan had a global turnover in excess of US$20 billion. It should and can pay a fair price for any electricity it consumes.

Eskom’s complete refusal to let the public know about its deal with Alcan raises significant and deeply worrying concerns about the state of our democracy. Does the South African Government think that secret deals with foreign companies are okay? Isn’t that what the Apartheid government did? How is the public able to monitor possible corruption in business deals if it doesn’t have the basic information about those deals? How are local businesses able to compete fairly if they don’t know what the going rate for electricity to industry is?

Earthlife Africa Jhb calls upon Eskom, Alcan and the Government to stop acting in a secretive, paranoid and undemocratic manner and release the details of the agreement signed between Eskom and Alcan. Further, given the current lack of transparency, the entire contract between Alcan and Eskom should be in the public domain. If the basic conditions of that contract are secret, who knows what other surprises are in store for us over the next 25 years?