Eskom in plea for higher tariffs
Eskom CEO Phakamani Hadebe on Monday made a desperate plea for higher Eskom tariffs over the next three years, as well as for more money from the government, while apologising to SA for the mess the utility is in.
Hadebe was speaking in Cape Town at public hearings held by the National Energy Regulator of SA (Nersa) to interrogate Eskom’s application for a 15% tariff increase beginning in 2019/2020.
The application needs to meet Nersa’s approval before it can be applied to customers.
Eskom is in a dire financial situation, with a R419bn debt it is unable to service from the revenue it earns.
It costs more for it to generate electricity than it recoups from tariffs due to a high cost base, which Nersa believes should not be made the burden of the SA public.
“I am the first to acknowledge that Eskom has contributed to its own problems.
“Eskom is compelled to apologise to SA for having brought these challenges. They could have been avoided.
“But they have built over time and the turnaround will take time,” Hadebe said.
Hadebe was appointed a year ago to turn Eskom around.
This, he said, would require a combination of higher tariffs, more financial support from the government and cost cuts.
He pledged that Eskom would save R150bn in costs over the next five years but said this would not be sufficient.
Eskom also needed assistance from its shareholder.
In December, Eskom chair Jabu Mabuza told investors the company would approach the government to request R100bn in debt relief, by taking some of its debt onto its own balance sheet.
Chief financial officer Calib Cassim said on Monday Eskom was in a debt trap, borrowing to cover debt service costs.
Debt costs were expected to grow to R600bn over the next five years.
Despite putting at least 10 senior executives under the axe in a bid to shave employees and minimise its bloated top management‚ Eskom has appointed eight executives and senior managers to a new operations team.
According to an internal memorandum seen by the Sunday Times‚ the eight appointments were made in high-paying posts such as group executives‚ general managers and chief officers.
‘Eskom is compelled to apologise to SA for having brought these challenges’ Phakamani Hadebe
ESKOM CEO