It’s a waiting game for Eskom

Embattled power utility Eskom is yet to receive feedback on the turnaround strategy it submitted to the department of public enterprises in November 2018.

At a climate change and sustainable development conference held at Eskom on Tuesday, general manager for corporate strategy at the utility, Leo Dlamini, said the plan was designed to deal with Eskom’s R420bn debt burden and a severe operational crisis.

Eskom COO Jan Oberholzer said the utility is awaiting feedback from the department.

Though it is still under embargo, Dlamini offered “a glimpse” into the plan, which hinges on five key elements: cost savings; increased revenue; balance-sheet optimisation; ring-fencing of business units; and the implementation of its nine-point plan to arrest the operational crisis.

On savings, Eskom would seek to cut costs to remove R20bn every year from its bottom line. On increased revenue, the electricity tariff needs to increase. Despite public resistance, Dlamini said electricity prices in SA are relatively low.

For “balance-sheet optimisation”, Dlamini said Eskom’s debt is too large while income from operations is too little.

In the budget presented by finance minister Tito Mboweni on February 21, R23bn would be allocated to Eskom each year for the next three years.

However, Dlamini noted that Eskom chair Jabu Mabuza had indicated about R100bn in relief is needed.

The fifth aspect, the ninepoint plan, seeks to tackle operational issues such as coal shortages, lack of maintenance and problems at new power stations Medupi and Kusile.