Eskom rescue plan in the works

FINANCE Minister Tito Mboweni will on Wednesday detail plans for a rescue package for embattled power utility Eskom, which is facing total collapse.

Yesterday, President Cyril Ramaphosa announced measures in Parliament to deal with the crisis at the state-owned enterprise.

Ramaphosa said a special Cabinet committee would handle Eskom issues on a daily basis, noting there would be a maintenance plan for the company to prevent blackouts.

Some of the power plants at Eskom are more than 40 years old. The lifespan of a power plant is 37 years.

Eskom last year asked the government to carry over R100 billion of its debt.

The entity has a debt of R419bn and the National Treasury and the government has described the power utility as a risk to the economy.

Ramaphosa said Mboweni would give more details on what would be done with Eskom.

“In his budget speech next week (Mboweni) will detail measures that (the) government will undertake to assist Eskom to stabilise its finances.

“It represents a significant commitment at a time when public finances are severely constrained,” he said.

However, Ramaphosa did not divulge the extent of the financial support to be injected into the power utility.

The president denied the unbundling of Eskom into three entities would result in privatisation, saying cost-cutting measures did not mean retrenchments.

Eskom was struggling to raise money from the capital markets in recent times, until last year when it reported to Parliament it was now able to gain access to funds from the market.

Eskom employs more than 40 000 people and the unions have warned against any job losses.

He announced a special Cabinet committee to be chaired by Deputy President David Mabuza.

The committee would deal with the Eskom crisis on a daily basis.

Other members of the committee are Public Enterprises Minister Pravin Gordhan, Energy Minister Jeff Radebe, Transport Minister Blade Nzimande and Police Minister Bheki Cele.