Cyril plans to rescue Eskom

South Africans will soon find out what government’s plans are for SA’s financial black hole, aka Eskom, President Cyril Ramaphosa announced at the Financial

Times Africa Summit yesterday, even as the parliamentary standing committee on appropriations met Auditor-General Kimi Makwetu about Eskom as part of its oversight function.

“One of the greatest challenges to our economy is the dire state of Eskom, which has huge debt, severe liquidity problems and extensive operational challenges,” Ramaphosa said.

“We have embarked on a process to strengthen governance, cut costs, improve revenue collection and increase energy availability and plant performance.”

Ramaphosa reiterated Eskom would be unbundled into three separate entities – generation, transmission and distribution – and reportedly said this would happen in the “next few days”, according to Fin24.

What “the next few days” means is anyone’s guess, although one option is for it to be announced when Finance Minister Tito Mboweni presents his medium-term budget policy statement to parliament on October 30.

Eskom announced a net loss after tax of R21 billion for 2018-19, up from R2.3 billion the previous year, while its debt has exceeded R440 billion, the parliamentary monitoring group (PMG) recorded last week.

“It spent R6.5 billion on diesel-generated power to minimise the magnitude of load-shedding.

“Municipal debt to Eskom rose to R20 billion. Additionally, environmental performance deteriorated further.

“Eskom’s chief financial officer said that Eskom has R440 billion worth of debt which will take about 10 years to pay at R45 billion per annum and the interest on that is R40 billion per annum totalling R85 billion per annum,” PMG said when Eskom presented its annual report to the public enterprises portfolio committee.

Eskom is currently preparing to challenge the National Energy Regulator in court over its decision on Eskom’s tariff increases of 9.41%, 8.1% and 5.22% for the next three years to 2022, which would leave Eskom with a shortfall of around R102 billion.