ESKOM MUST WAKE UP

The financial markets may yet again come to SA’S rescue and restore some semblance of sanity to the governance of state-owned entities.

The JSE’S warning to Eskom this week to publish its overdue half-year financial results by the end of January, or face the suspension of the utility’s bonds from the bourse, is exactly the sort of stick that makes corporate laggards sit up and pay attention. The utility has repeatedly failed to publish the figures for the six months to the end of September, which should have been released last year.

Back in 2012, the market applied this same stick to fixed-line monopoly Telkom, with demonstrably effective results. Huge capital losses followed, as investors sold their Telkom shares. Finally, with the company facing the real prospect of collapse thanks to clueless leaders and undue political interference, the politicians sobered up. Telkom pulled back from the brink. Once new, disciplined leaders took over, it finally found its feet. Today, it is a worthy competitor to the mobile firms that have encroached on its communications monopoly.

Let’s hope Eskom can pull back from the brink too. After all, its debt exposure of nearly R500bn — the biggest of any entity in SA — makes it a disaster waiting to explode. If those creditors come calling to demand repayment, it’s a crisis SA may not be able to withstand.