Another bailout will not fix Eskom

21 February 2019

The Minister of Finance, Tito Mboweni, announced another set of bailouts for struggling state-owned entities (SOE’s) yesterday in his budget speech.

The R69 billion lifeline promised to Eskom over the next three years is not enough to keep Eskom afloat, with the utility sinking faster than the Titanic.

The truth is that Eskom has hit an iceberg in the form of mounting debt of R419 billion - and climbing, an oversized workforce, low productivity, lack of critical skills, brand-new faulty coal power stations, scar tissue from years of corruption, maintenance backlogs and strategic errors.  When one adds the municipal debt that is owed to Eskom, the ship had only one way to go - and that is down.

The financial lifeline and rejig of Eskom into three entities will not be enough to save Eskom. Even with three units, there will still be only one board calling the shots. What Eskom needs is a complete overhaul, not a mere rejig.

That kind of overhaul should mean splitting Eskom into a generation entity completely independent from a distribution/transmission entity. The generation entity should be privatised over time, where well-functioning power stations can be offloaded to the private sector to create much-needed competition.

The DA’s cheaper electricity bill will do just that and create a cheaper and more stable energy sector. Our bill was gazetted in Parliament for public comment yesterday and is the first real concrete step to changing Eskom’s structure.

The DA will continue to fight for every citizen of South Africa to ensure that we are not burdened with expensive electricity or forced to pay for Eskom and the ANC’s blunders.

The DA will fight for One South Africa for all where there is a stable, cheap and clean energy supply.

Issued by Natasha Mazzone, DA Shadow Minister of Public Enterprises, 21 February 2019