Eskom is a financial blackhole – Why increased tariffs and bigger bailouts won’t fix the entity

Issued by Ghaleb Cachalia MP – DA Shadow Minister of Public Enterprises
31 May 2023 in News

Note to editors: Please find attached soundbite by Ghaleb Cachalia MP.

Eskom has just declared its largest-ever loss – R21.2 billion. This is despite successive tariff increases – the last one being 9.61%, with another scheduled to kick in at 18,6%.

The financial bleeding at Eskom is continuing despite the recent announcement of R254 billion Eskom debt assumption from Treasury, over the next 3 years.

The financial blackhole that is Eskom will only continue to get worse with the increased use of Open Cycle Gas Turbines (OCGTs) to burn diesel at record rates.

None of these measures are sustainable until a scalpel is used to eradicate corruption, address bloated worker levels and wage demands, eliminate useless cadres from the utility and the employment of seriously competent people to fix what is broken.

This needs political will, board support and an exco that is experienced and versed in all aspects of Design, Procurement, Finance, Projects Management, Construction, Commissioning & Testing and Operating & Maintenance. Moreover, it will require a CEO with the wherewithal to stand up to the powers that be – board and minister – on the basis of an iron grip of the competencies mentioned above.

In the absence thereof we will continue our passage into darkness and bankruptcy.

The DA has assessed the three candidates for CEO – the key position in this imbroglio – and is of the opinion that despite their varied competencies, some relevant and applicable and others not, and came to the conclusion that none will be up to the challenges, not least the ability to stand his/her ground.

What is needed is, as the DA said, when this crisis first raised its head, is the Red Adair of the Electricity Business worldwide to wade in and fix the mess, but that would need the chairman, his/her board and the minister to take a back seat and government to rise in support of his/her actions.