Dim hope for Eskom ‘plans’

EXPERT: BENEFICIAL BUT BALANCE SHEET A PROBLEM

The power utility wants to sell off core assets – but an expert says this new plan is nothing but a pipe dream and it is clutching at straws.

Unions have not been consulted but reject any suggestion of privatisation.

Power utility Eskom is clutching at straws if it thinks plans to unbundle or sell some of its core assets in order to prevent bankruptcy is feasible, since such a decision is unlikely to get the nod from its main stakeholders – its creditors, government and unions.

This is according to energy expert Ted Blom, who added that without agreement between all parties, the plan was a mere pipe dream.

The Sunday Independent yesterday reported that plans to privatise sections of Eskom allegedly emerged after senior executives met last week to discuss the company’s continuing financial woes.

Both the National Union of Mineworkers (NUM) and the National Union of Metalworkers of South Africa (Numsa) have rejected any suggestion of privatisation of the state-owned enterprises because, they claimed, that would result in job losses.

Blom said while the benefits of unbundling or breaking up the assets were good in terms of improving transparency and governance, it would be impossible without determining who was going to bear the R1-trillion missing from its balance sheet and its massive debt.

Plus, Eskom’s decision to overvalue its assets at R1.3 trillion when they were worth R200 million would worsen its position.

NUM general secretary David Sipunzi said they were opposed to any form of privatisation and such a decision must be made in consultation.

“We believe that if Eskom wanted to unbundle, we would have been engaged. There needs to be consultation, but we know there are people who are running down Eskom so when it is sold, it would be sold for one cent,” Sipunzi said.

He said if Eskom was to be sold, it had to be sold “voetstoets” and that should be preceded by public consultation as the asset was a public entity.

Sipunzi expressed concern that privatisation would also effectively increase electricity tariffs which would be borne by the consumers, with the poor particularly likely to be affected. –