Eskom sheds hope
EXPERT: ANOTHER R1.7TN WILL BE REQUIRED TO RESTORE ‘ROTTEN’ SOE
With ratings agencies poised to assess SA and President Cyril Ramaphosa attempting to woo foreign investors, Eskom’s latest blackouts could have far-reaching consequences and an expert says R1.7 trillion will be needed to return utility to its former glory.
Latest blackouts would have been particularly embarrassing for president.
Eskom would need at least R1.7 trillion to restore it to its heyday, energy expert Ted Blom said following the surprise renewal of rolling blackouts yesterday.
Promises of “no more load shedding” and “Eskom is too big to fail” are just two statements bemused South Africans recalled yesterday when they woke up to stage two load shedding – something Eskom has known about since at least last Saturday.
Castigating Eskom as a “rotten” organisation for not warning the country, Blom said Eskom was also between a rock and a hard place.
“They were told they can’t release bad news because of President Cyril Ramaphosa’s wooing of investors. Meanwhile, I’ve been part of Eskom’s upcoming sustainability report which shows Eskom is in a R3 trillion hole,” Blom said.
“The government has pleaded with the author of the document, of which I was a co-contributor, not to go public with it. It will be released before Friday.”
Blom said R1.3 trillion had already been “blown” in the past 10 years, while to fix the mess Eskom was in would take another R1.7 trillion.
The money would be spent on catching up with maintenance, fixing Medupi and Kusile power stations, and sorting out the water and coal shortfall.
The problem, said Blom, is that SA didn’t have that kind of money which is why it would be approaching the International Monetary Fund for assistance.
Political analyst Daniel Silke noted the blackouts would have been particularly embarrassing for Ramaphosa, given he had just been the keynote speaker in London at the Financial Times Africa Summit.
“There he had extolled the virtues of investing in South Africa and the load shedding undermines his message to investors about SA’s broader operating environment,” said Silke. “It’s a personal embarrassment in a sense.”
Silke said there was a sense the economy had bottomed out after the broader economy had shown “a little blip” in the second quarter and that the tide was turning.
“If there was a return to the instability and volatility load shedding brought in the first quarter of this year, that would absolutely undermine the growth objectives of government and set us back again in our quest to sustain higher growth,” said Silke. –