Task team sets tight timeline for Eskom

The task team set up by President Cyril Ramaphosa to resolve Eskom’s problems is pushing the utility to meet tight deadlines for its unbundling while it grapples with operational issues.

Thuto Shomang, the acting directorgeneral of the department of public enterprises, said on Friday at an Absa post-budget breakfast that Eskom had been working on its own restructuring plan since Phakamani Hadebe’s appointment as CEO in May 2018.

This plan had already proposed a functional unbundling in two years and a three- to five-year period for a legal unbundling.

But the sustainability task team appointed by the president in December 2018 has pushed for earlier timelines. The budget review made specific mention of separating out transmission as a subsidiary within four months and bringing in strategic equity partners.

But Shomang said it would be difficult to take definitive steps around equity investors for Eskom now.

“The thing is we first need to improve the operational performance of Eskom, deal with the separation of the businesses and then as we go along, we look at all of those things.”

He said Hadebe had worked on a turnaround plan that acknowledged the need for Eskom to be unbundled, for tariff hikes to make the utility sustainable, for cost-cutting of between R25bn and R30bn, and shareholder support.

Shomang said the task team wanted Eskom’s legal unbundling timelines brought forward. This and the appointment of a chief reorganisation officer, which finance minister Tito Mboweni said in the budget was a condition for future financial support, appears to have created unease.

Spokesperson for the department of public enterprises and the task team, Adrian Lackay, said urgent steps had to be implemented, even though the unbundling process may take three years.

“By mid-2019 the systems operation must be established.”