The sad downfall of the once mighty Eskom

Dipping into Eskom’s annual reports over two decades makes interesting reading. Even up until 12 years ago, it could claim some successes, generating enough electricity to supply the country and many of our neighbours. Let’s go back 18 years. According to its 2001 report, it was, in that year, named the Financial Times Power Company of the Year at the Global Energy Awards Ceremony in New York. The report notes that at the ceremony it was described as “providing the world’s lowest-cost electricity, while at the same time making superior technological innovations, increasing transmission system reliability, and developing economic, efficient and safe methods for combustion of lowgrade coal.” In the 2005 annual report its then chair Reuel Khoza proudly noted that “unlike other major institutions, Eskom did not operate under a regime of crippling debt or unsustainable subsidies from government”.

In 2007 it recorded a profit of over R6bn and sales had grown by an unexpected 4.9%. It was generating 45% of the electricity in Africa.

Jump to 2019 and the picture is a very different one. From Khoza’s proud record of zero debt it now owes over R450bn – which amounts to about 15% of the state’s total debt. Municipalities owe Eskom some R27bn and this is growing at a reported rate of R1bn a month. In 2007, it had just over 32,000 employees and its wage bill was R9.7bn. It now employs over 47,000 and its wage bill is around the R30bn mark.

What happened between 2007 and the catastrophe of 2019 was the rule of Jacob Zuma which was characterised by greed, devastating corruption, state capture, criminal inefficiency.

Finding ways to glue back together what was once a great national electricity utility will take innovative thinking and tough decisions. But, the proposed restructuring, unbundling and rightsizing of Eskom has the union’s knickers in a knot. While one has some sympathy for their fears of job losses, it is time unions put the needs of SA first. If the unions continue to block positive change at Eskom, this country has no hope for further growth. Until we can again boast a cheap and secure source of electricity, job security for the lucky few that have jobs will be uncertain and future job creation will remain a dream.

If the unions continue to block positive change at Eskom, this country has no hope for further growth