Why Eskom ‘must get’ R100bn bailout

If the embattled power utility goes down, SA will too, says Outa’s Wayne Duvenage.

But utility must get itself out of debt and act against those who put it there – Outa.

Eskom’s Christmas wish for a R100-billion state bailout may rub most South Africans up the wrong way, but an expert says there may be sanity in it.

South Africans are experiencing ongoing power cuts due to a myriad of problems at the electricity giant.

The struggling power utility has reportedly asked the government to take on R100 billion of its nearly R400 billion debt, which would add 2% to the government’s debt-to-GDP ratio.

Organisation Undoing Tax Abuse CEO Wayne Duvenage said many would frown on a R100 billion state “bailout” to get Eskom out of its financial woes, especially since it got itself into that mess.

However, considering how dependent South Africa was on electricity from Eskom, he said Minister of Public Enterprises Pravin Gordhan’s request that the state foot the bill to keep the lights on was reasonable.

He said: “If Eskom goes down, the whole country will crash.

“So while Eskom is in a deep hole of debt, the R100 billion state bailout may not be a bad idea.

“However, Eskom also has to work on better clarity and give us online daily, weekly and monthly performance reports on what is going on within the utility.

“They should also give us their long-term business plan to give SA an indication of the costs involved and how they plan to get out of their financial woes.”

Duvenhage said that should include a detailed plan of action to deal with the companies that had a hand in running the utility company into the ground.

These included Hitachi, which allowed ANC investment arm Chancellor House to take shares in an alleged sketchy deal a number of years ago.

He said this was important because no action had been taken to hold Hitachi accountable.

But now the country’s new leadership had to gain the trust of the people by dealing with the matter accordingly.

Hitachi and Chancellor House could not be reached for comment yesterday.

Last week, it emerged they could be partly to blame for the current crisis because of the bad design of the Kusile and Medupi power stations.

This meant that several units at the two stations would have to be shut down for repairs costing billions.

Eskom CEO Phakamani Hadebe has admitted that the cost of both power stations tripled from the initial estimates.