Eskom clocks a R24 billion loss but still wants a new logo
31 October 2023
Corporate dissonance was laid bare today when Eskom, which currently has an open tender for a new logo, announced that it has registered a record-breaking R24 billion net loss for the year ended March 2023.
By getting another qualified audit, Eskom has once again proved that it has no plan to stop the bleeding and has instead resigned itself to the reality that it is a badly run organisation.
The failure to reign in loadshedding means that there won’t be change to Eskom’s financial crisis even if they keep getting double digit and above inflation tariff increases every year. The load shedding is shaving off almost 10% of sales, and hence revenues, from a business that is at least 60% fixed-cost business. In addition to the reduced top-line comes an increased cost of goods sold because of the high diesel usage.
It easy to see why the continuous burning of diesel to run the Open Cycle Gas Turbines is not a sustainable long terms solution to fix loadshedding. This practice is burning a hole in Eskom’s finances and eating away at budgets that could have been better spent on capital projects like the expansion of the transmission network.
Today’s presentation of Eskom’s financial statements has all but confirmed what we have always known – Eskom is bankrupt and no amount of taxpayer funded bailouts will ever return to profit again. Yet the ANC government is happy to keep throwing taxpayer money at this failed entity and subsidise its death spiral.
Eskom’s shambolic finances have exposed why the imposition an aggressive 31,4% tariff increase over two years has been nothing but a hostile raid on consumer pockets to subsidise the entity’s losses. South Africans have become Eskom’s captive victims as they forced to pay for high tariffs for electricity that they only receive some of the time.
Despite running a multi-billion rand loss, Eskom had the audacity to issue a tender asking service providers to provide services for the design of a new logo and the development of a new corporate identity for Eskom and its subsidiaries. This corporate dissonance is clear evidence of an organization that has lost its way and has lost sight of its strategic purpose – which is to provide electricity.
While the acting CEO, Calib Cassim has acknowledged receiving the DA’s letter requesting him to use his executive authority as Eskom’s chief accounting officer to cancel the tender, it remains our considered view that Eskom does not have the financial luxury to be engaging in vanity projects at taxpayers’ expense.
Issued by Ghaleb Cachalia, DA Shadow Minister of Public Enterprises, 31 October 2023
