19 February 2007

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

Earthlife Africa Jhb-SECCP

In mid-December 2006, Earthlife Africa Jhb 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 and what the conditions of supply were, and if Alcan could on-sell unused electricity.

Earthlife Africa Jhb asked a series of specific and general questions concerning the contract between Eskom and Alcan and Eskom has refused to supply any details. In refusing access Eskom cited exemptions relating to protection of commercial confidentiality, trade secrets and economic and financial welfare of the Republic' 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 is 100% owned by the South African State, and the electricity it produces is a public good. Eskom is a therefore a public asset, and has a responsibility to ensure production of sufficient 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 advise the public 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? If so, are they walking in the footsteps of the Apartheid government? How is the public able to monitor potential corruption in business deals if it doesn't have the basic information about them? How are local businesses able to compete fairly if they don't know what the going rate of electricity is?

Tristen Taylor, the Energy Policy Officer at the Sustainable Energy and Climate Change Project, states, "With the deal between Eskom and Alcan already signed, the only people whose rights could be infringed upon by releasing the contract between Eskom and Alcan are the South African people. Maybe Eskom is afraid of the public reaction if it sold electricity to Alcan at a ridiculously low amount, such as 0.02 cents a kilowatt hour."

Earthlife Africa Jhb calls upon Eskom, Alcan and the Government to stop acting in a secretive and undemocratic manner and release the details of the agreement signed between Eskom and Alcan. If there is good cause for some particulars of the contract between Alcan and Eskom to be kept out of the public domain, Eskom should provide a detailed justification. If even the basic conditions of that contract are secret, who knows what other surprises are in store for us over the next 25 years?

For more information, please contact:

Tristen Taylor
Energy Policy Officer
Earthlife Africa-Johannesburg Branch
Tel: +27 11 339 3662
Fax: +27 11 339 3270
Cell: +27 84 250 2434
Email: tristen@earthlife.org.za