Debate on Eskom urgent – Gordhan

Eskom, which supplies almost all of SA’s energy, is in dire financial and operational straits.
Eskom, which supplies almost all of SA’s energy, is in dire financial and operational straits.
Image: Mark Wessels

The debate over whether to split Eskom into three parts was urgent as a decision was needed in the next month, public enterprises minister Pravin Gordhan told business leaders on Wednesday.

The comments indicate the speed with which the government intends to move in restructuring the troubled utility, with an eye to making decisions as soon as the tabling of the budget in February.

Eskom supplies almost all of SA’s energy and its financial and operational crises threaten to cripple the whole economy.

A task team set up by President Cyril Ramaphosa is to share its recommendations with the cabinet this week.

Recommendations include splitting Eskom into three separate state-owned companies dealing with generation, transmission and distribution, as well as a substantial debt bailout from the government.

Eskom is in dire financial straits with R419bn in debt, which it is unable to service from its own revenue.

Gordhan said that problems at state-owned companies could not be solved without restructuring.

“Should we unbundle Eskom into three entities as is the practice worldwide?

“We are going to have that debate soon and move beyond debate if we are to have Eskom as a credible entity both financially and operationally in a month’s time,” he told Business Unity SA’s economic indaba in Midrand.

Trade unions have already voiced their strong opposition to the plan.

The National Union of Metalworkers of SA and the National Union of Mineworkers, two of the biggest unions at the power utility, have threatened to strike if the split goes ahead.

Gordhan also said that Eskom needed to augment its engineering skills urgently as the task team had found that 40% of technical breakdowns were due to the human factor.

He said good people had been lost and incompetent people put in their place.

This had happened, for instance, at Eskom power stations.

Eskom might have to consider bringing in people with technical expertise from outside the country, he said.

“Whether it is deliberate human factor or accidental human factor is open to debate.”

Eskom’s plants are in a poor state of repair due to postponed or forgone maintenance causing unplanned outages, which have constrained the system and brought back the risk of load-shedding.

Its energy availability factor – measured by the amount of electricity available for dispatch – is only 74% and falling.

This is significantly lower than in 2017, where the availability factor stood at 79%.

The target level is 80%. –

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