Hard decisions needed at Eskom

As the proverbial cherry on top following years of troubles at the parastatal, Eskom's irregular expenditure has ballooned to more than R19bn dating back to 2012. This was among the more staggering figures revealed by board chairman Jabu Mabuza and other managers on Monday when the state-owned power producer’s latest financial results were announced. On top of that, Eskom suffered a record net loss of R2.3bn in the 2017-18 financial year, compared with a R0.9bn profit the previous year. Liquidity remains a massive concern: its debt increased from R387bn to R600bn in just four years and municipalities around the country now owe Eskom some R4.2bn.

The abysmal results are not surprising when you consider that Eskom has been plagued by allegations of corruption and mismanagement for many years now.

With every passing year under former president Jacob Zuma’s watch the looting there became more brazen, the bonuses more obscene, the excuses more mind-boggling – all of it seemingly with government’s tacit acquiescence.

Mabuza, appointed in January, spoke on Monday of shaking the Eskom cupboard so hard that many skeletons came tumbling out. This is exactly what the SA public had been waiting for. After all, how much longer could the free-for-all have been allowed to continue?

President Cyril Ramaphosa promised sweeping changes and an end to the rot, starting with the appointment of the new board in January. But the profound damage that was done will not easily be undone, even with a new board driving change.

Eskom’s business model has not been sustainable for a very long time and, unless less urgent interventions are put in place, it will continue to result in ever-increasing electricity tariffs and spiralling debt.

The eventual collapse of the ailing utility is not inconceivable, which would have dire consequences for the SA economy.

Hard decisions and a fresh approach are needed if our energy sector is to be saved.