MPs hear litany of Eskom woes
Eskom’s R420bn debt burden represents 15% of sovereign debt and if the power utility defaults on its debt it will threaten the economy, department of public enterprises acting director-general Thuto Shomang said on Wednesday.
Shomang told MPs that cash generated by the company did not cover operating and debt-servicing costs.
The escalation of municipal and Soweto debt to about R28bn was another problem‚ as was the increase in the number of employees from 32‚000 in 2007 to 48‚000 in 2018, with the associated cost growing from R9.5bn to R29.5bn.
Shomang said Eskom was struggling to maintain operational sustainability due to the ageing-generation fleet, with essential mid-life refurbishments not implemented and poor quality of maintenance, with 40% of plant breakdowns due to human error.
Eskom also faced ongoing coal shortages due to poor management and lack of investment in cost-plus mines, as well as a loss of critical skills and low staff morale‚ he said.
Shomang noted that the building of Medupi and Kusile power stations had suffered massive delays and cost overruns due to poor planning‚ poor engineering design‚ poor procurement practices or poor contracting and corruption.
The costs for the plants had escalated significantly to more
Eskom is struggling to maintain operational sustainability
than R300bn – Medupi from R24.9bn to R145bn and Kusile from R80.7bn to R161.4bn.
He said systemic corruption‚ malfeasance‚ fraud and state capture had compromised the credibility of Eskom and eroded investor confidence.
Public enterprises minister Pravin Gordhan‚ who cut short his cabinet meeting attendance to join the parliamentary meeting‚ said finance minister Tito Mboweni might announce a cash injection for Eskom next Wednesday. –