Eskom’s looming bankruptcy can only be prevented by privatisation
24 July 2018
Seen in the light of auditors’ misgivings about whether Eskom can continue as a going concern, there is only one way to save Eskom and that is through privatisation, be it partially or completely.
Eskom admits that high debt levels, financing costs and low power sales seriously threaten its sustainability. Concerning the latter, the FF Plus cautioned Eskom during the period of serious load shedding that Eskom’s request that clients must not make use of their product will ultimately result in Eskom losing its clients for good.
In the interim, many power consumers have made alternative plans to generate power and thus Eskom’s market shrunk. The FF Plus’s warnings fell on deaf ears.
Furthermore, Eskom’s irregular expenditure, which amounts to R19,6 million, is nearly as much as the amount of money that the National Treasury aims to collect with the 1% VAT increase. That is all the more reason for the government not to offer Eskom a financial bailout, but rather to allow the state-owned enterprise to seek private investors.
The FF Plus is cautioning the government not to use tax payers’ money to offer this reckless state-owned enterprise any more financial help. Hard lessons will be learned if Eskom is not privatised and responsibly managed.
Issued by Anton Alberts, FF Plus chairperson and parliamentary spokesperson: Energy, 24 July 2018