Mabuza says Eskom needs to be supported

DEPUTY President David Mabuza said yesterday the government has taken a view that Eskom should be supported to implement a comprehensive turn around plan.

Mabuza made the statement when he was asked a question in the National Assembly on the disappointing financial results announced by Eskom for the financial year ending in March 2020.

IFP MP Mzamo Buthelezi asked what the government’s response was to the announcement and how it intended in implementing a rapid response to the issues cited by Eskom such as its unsustainable debt burden which led to a net loss of R20.5 billion.

Mabuza said they have been open and frank about the issue surrounding the power utility and how it should be turned around for it to succeed.

"Even to this date we continue to be alive to the reality faced by the power utility, largely informed by legacy issues and other rising debts," he said.

"As a government our top priority is to address the financial and operational challenges and return it to a growth trajectory given the strategic role and importance of Eskom to the economy," Mabuza said.

The deputy president noted that Eskom's liquidity remained constrained due to poor long term financial sustainability and that the government equity support was for the servicing of debt commitments.

"Nonetheless equity support only improves liquidity but will not finally resolve Eskom's financial viability," he said.

Mabuza also said the rising municipal debt continued to pose serious risk to Eskom's long term financial sustainability and significantly contributed to liquidity challenges that faced the entity.

"We fully support Eskom's effort to collect on the debt by following its credit control measures.we reiterate our commitment made in both Houses to ensure organs of state to expedite payment that is outstanding and that is owed to Eskom and that they settle debts that are owed to municipalities."

He also called on the public to pay for services they consumed, including electricity and water.

"We have a responsibility to improve a culture of payment of services such as electricity and water by our communities to avoid unnecessary disruption of the provision of services.

"We are in a process of rolling out a comprehensive campaign to raise awareness and encourage our people to pay for electricity and other services that they consume," Mabuza said.

"We make this clarion call to all our communities to pay for services so that Eskom and municipalities provide these services on a continuous and sustainable basis."