Eskom seeks light from Mboweni
Power utility needs cash injection by April
Medupi’s cost has gone from R24.9 billion to R145bn and Kusile from R80.7bn to R161.4bn
PRESIDENT Cyril Ramaphosa is today expected to announce plans to save the embattled Eskom with the Department of Public Enterprises having told Parliament that the power utility will reach day zero if it does not get a cash rescue by April.
Briefing the public enterprise portfolio committee yesterday, acting director-general Thuto Shomang said Eskom was technically insolvent and at its current trajectory would cease to exist in a matter of weeks.
Shomang told parliamentarians that Eskom was struggling to maintain operational sustainability with its ageing generation fleet which on average is about 37-years-old.
There has been no implementation of essential mid-life refurbishments, and there was poor quality of maintenance due to poor workmanship with at least 40% of plant breakdowns due to human errors, he said.
He told the MPs that Medupi and Kusile plants have suffered massive delays and cost overruns due to poor planning, poor engineering designs, poor procurement practices and corruption.
“The costs for the plants have escalated significantly to over R300 billion, Medupi from R24.9bn to R145bn and Kusile from R80.7bn to R161.4bn,” Shomang said.
Shomang said the utility’s current debt was standing at R435bn, which represented 15% of the sovereign debt.
“Any default at Eskom is threatening the economy,” he said.
He said the escalation of municipal and Soweto debt, totalling R28bn, was growing at R1bn a month.
Speaking at the meeting, Minister Pravin Gordhan said those who were responsible for corruption at Eskom should be imprisoned.
He said that systemic corruption, malfeasance and fraud had compromised the credibility of the power utility.
“Any person caught in corruption, in any situation and any sphere of government should be in an orange uniform,” Gordhan said.
Responding to a question on whether there was an investigation into possible sabotage regards load shedding and what was being done, Gordhan said: “Is there sabotage? I have not seen evidence to suggest there is.”
Gordhan noted that mismanagement and replacement of good people, and corruption has all together damaged “this very important institution”.
“Today we deal with the culmination of effects of all that has happened before,” he said.
Gordhan said President Cyril Ramaphosa had stated that security of supply was absolutely imperative for the economy and every household.
“What we will hear next Wednesday from the finance minister is a lot more on financial support Eskom will be receiving from government given the fiscal constraints,” he added.
As a solution was sought, the Eskom debt was no easy matter, he said.
“It requires a fair amount of complexity and determination by government to ensure it is not a financial burden in the medium term. Some solutions will begin to emerge in this particular regard,” he said.
Asked how long load shedding would last, Gordhan said he had thought in December that it would be over. Gordhan said litigation would be pursued regarding shoddy workmanship as “state capture messed up many systems” and public money went in the pockets of the wrong people.
“There must be consequences.”
Thuto Shomang
Acting general director, Eskom
Ramaphosa had stated that security of supply was absolutely imperative for the economy and every household.
“What we will hear next Wednesday from the finance minister is a lot more on financial support Eskom will be receiving from government given the fiscal constraints,” he added.
As a financial solution was being sought, the Eskom debt was no easy matter, he said.
“It requires a fair amount of complexity and determination by government to ensure it is not a financial burden in the medium term. Some solutions will begin to emerge in this particular regard,” he said.
Asked how long load shedding would last, Gordhan said he had thought in December that it would be over.
“What I would like to assure is that everything is being done to ensure we minimise load shedding,” he said.
Gordhan said litigation would be pursued regarding shoddy workmanship as “state capture messed up many systems” and public money went in the pockets of the wrong people.
“There must be consequences. There should be no distinction in that regard.”