Privatisation is Eskom’s only hope in light of ballooning debt and R18.9bn in losses

1 September 2021

Despite valiant attempts to cut debt, Eskom’s annual results reveal an outstanding amount of R401.8 billion – the finance costs thereon reversing an operating profit of R5.8 billion into a loss of R18.9 billion.

While Eskom’s current leadership is arguably the strongest in years at prudent financial management – even if those strengths are sorely lacking on the technical and engineering side – they are facing a Sisyphean task when it comes to dealing with the mountain of debt.

If you add to this the cost of compliance with emission challenges which is estimated at R300 billion, the problem is compounded beyond ken.

Perversely, in the Covid- related economic downturn environment where demand has dipped by as much as 11 000 MW South Africans have had to endure more loadshedding than ever.

In view of this and repeated warnings by the DA over many years, all we have seen is the presentation of turnaround plan after turnaround plan to successively worse effect –  yet the minister and his department remain steadfastly opposed to any efforts at privatization, hoping that private investors will come to the rescue on his terms.

It doesn’t work that way, and while we face the prospect of ongoing loadshedding, Minister Pravin Gordhan had best wake up to the realization that Eskom, unlike SAA is no mere albatross around the neck of the Treasury, it is in the words of Ed Stoddard of the Daily Maverick, a whale – of massive proportion – about to beach or impale itself on a harpoon. South Africans demand that this reality is faced and that this state market failure to provide public goods as per its mandate now be fully addressed by the private sector.

The DA will continue to champion this unassailable logic in the interests of all.

Issued by Ghaleb Cachalia, DA Shadow Minister of Public Enterprises, 1 September 2021