Eskom clarifies cash status
ESKOM on Monday insisted that the 2.2% tariff increase for the 2017-18 financial year will present challenges to the utility’s liquidity position for the current financial year.
It reiterated this point yesterday in the wake of media reports related to its liquidity challenges and financial sustainability.
“As a result, Eskom has had to undertake certain financial commitments to ensure sufficient liquidity, in line with its funding requirements.
Cost containment has been one of the key components of our strategy. The company’s cost-cutting measures are bearing fruit, with a saving of R47bn realised from the 2012-13 to 2017-18 financial years,” it said.
Reports emerged on Monday that the utility was on the brink of insolvency with only R1.2bn of liquidity reserves expected to be on hand at the end of November.
Eskom said it had adopted an aggressive sales volume growth to support economic growth.
To date, Eskom had secured approximately 56% of its funding requirements for the current financial year, it said. Eskom kept the lights on in 2016 after threats of nation wide blackouts caused by a shortage coal. Eskom increased tarrifs but still fell under budget in meeting their profit margins for the financial year. Government has been criticised for bailing Eskom out, some calling for the privatisation of the State owned entity.