Cyril’s task team set to help Eskom

President Cyril Ramaphosa has appointed an eight-person task team to advise government on ways to manage the financial and operational crises at Eskom that have led to the return of load-shedding and threaten the country’s fiscal sustainability.

The committee, whose members include former executives Brian Dames and Mick Davies, will also review a turnaround strategy submitted by the board, including “key assumptions, impact on tariffs and industry, and viability of proposed solutions on the future role of Eskom”, the presidency said on its website at the weekend.

The committee will issue its report before the end of January, according to the statement.

The committee has been given a broad mandate that will also assess the “appropriateness of the current Eskom business model and structure”, though there was no specific mention of a proposal that government take over R100bn of the company's debt, nearly a quarter, onto its own balance sheet.

That plan has already been rejected by finance minister Tito Mboweni, who said Eskom should rather raise funds in the bond market.

Ramaphosa indicated that he agreed with Mboweni, telling Radio 702 that a debt swap would “descend us into further deeper debt as a country” and that other options should be looked at.

“The assessments that will be carried out by the task team arise from government’s concern that the lack of adequate electricity has a negative impact on economic recovery and that there is a need for intervention in the short- and medium-term, to restore the supply-demand balance,” the presidency said.

“This is coupled with severe financial constraints at Eskom, which impact on the fiscus, and where operational and financial issues have become interrelated and need to be addressed simultaneously.”