Take the pain

One of Ramaphosa’s big announcements was that troubled Eskom will be broken into three divisions and will receive government support to help to stabilise its balance sheet. More details would be provided in the budget speech in two weeks’ time.

He put to bed concerns that unbundling Eskom would result in the sale of parts of it. He said the government would never support the sale of strategic assets. But the core competencies — generation, transmission and distribution — would stand on their own under the umbrella of Eskom Holdings.

He did not mince his words about the state of the utility. He said it was in crisis and required urgent steps to turn its fortunes around.

“It could severely damage our economic and social development ambitions. We need to take bold decisions and decisive action. The consequences may be painful but they will be even more devastating if we delay.”

Part of the pain would include approaching labour about this “just transition”, not only about the unbundling, but also about what reducing costs would entail.

For the consumer, he said there would be “an affordable” tariff increase, but he was critical about municipal debt, which had spiralled to R17-billion by November. Eskom’s own exposure to lenders was more than R400-billion and it had asked the government to take over R100billion of this.

“We need to take steps to reduce municipal nonpayment and confront the culture of nonpayment that exists

Sarah Smit

LAW AND ORDER Sting in the tail

The president’s announcement