Is another billion-rand Eskom bailout on the cards?
14 July 2023
Breakdowns at Eskom are currently at 17 679MW of generating capacity with an additional 3 090 MW out of service for planned maintenance. This has resulted in the implementation by Eskom of Stage 6 load-shedding, after much ministerial fanfare about how Eskom had enough generating capacity to withstand the onset of cold weather.
The question is: where are we heading?
Among many strict conditions of the recent bailout the utility received, the agreement stipulates that Eskom cannot take on any more debt and imposes conditions that restrict the utility’s access to loans for three years, pending written permission from the Finance Minister.
Is there therefore yet another bailout is on the cards to meet the ongoing profligate spend on diesel while a proverbial genie is coaxed out of a bottle to attend to the self-inflicted scars on our power plants?
Meanwhile, the utility awaits the appointment of a new CEO who, however qualified and courageous, will be impotent in view of the current ongoing logjam occasioned by running coal-powered and peaking plants – yet again – at breakneck speed. This, in the face of throttled demand and the clear inability to plan for estimated consumption.
Even if the new CEO is a world expert – the Red Adair of the electricity business – well-versed in all aspects of Design, Procurement, Financing, Construction, Operation, Commissioning & Testing, as was Ian McRae and his so-called ‘dream team’ who built and ran the plants we have today, he or she would be unable to effect any immediate solutions to mitigate blackouts and the threat of a grid collapse without the requisite funding and expertise.
That neither of these are available raises the question of whether we are heading inexorably toward this dark point or whether yet another tranche of taxpayer’s money will be thrown into the vortex of no return? Business, industry and ordinary citizens need answers, while the minister dithers and deliberates as to who to appoint as CEO – from a shortlist that hardly meets the mettle of a Red Adair.
After all, government announced as part of Eskom’s debt relief bill that funding for the completion of Kusile and Medupi and any other capital expenditure required for the maintenance of the existing fleet will be from Eskom’s internally generated funds (itself under significant pressure given the eye-watering loss posted in the previous year and those projected for the current year). Any deviation from this process can only be executed upon written permission from the Minister of Finance.
The DA will accordingly table a question in parliament to determine what the financial plans are and what the implications thereof will be to meet the full requirements of operational maintenance and the ongoing reliance on diesel.
Issued by Ghaleb Cachalia, DA Shadow Minister of Public Enterprises, 14 July 2023
