Johannesburg - It never rains but pours for electricity utility Eskom as it ends the week with a ratings downgrade, a shocking new tariff application and still no word on its mooted three-month enquiry.
The parastatal’s most recent troubles started on March 12 with a board announcement that it was to suspend four of its executives and institute an enquiry. The suspended executives included CEO Tshediso Matona and CFO Tsholofelo Molefe.
This led to rating agency Standard & Poor downgrading Eskom, noting that the suspension made it have “less confidence in the company’s corporate governance arrangements as well as in its stand-alone credit profile”.
S&P lowered its long-term rating on Eskom to BB+ from BBB and its national scale ratings to zaA/zaA-2 from zaAA-/zaA-1 and kept a negative outlook on the utility.
The enquiry,set to begin on Monday, now appears to have stalled as the terms of reference, which ANA understands have been finalised, have not yet been officially announced.
At the same time, it has been reported that Eskom is to apply for a 25% tariff increase to take effect in April and July. This is to help fund diesel supplies that it requires to run some of its power stations. The tariff opener is an application processed as an emergency outside of the normal tariff adjustment period, and is twice the 12,5% increase Eskom has already been granted.
Earlier today, Deputy President Cyril Ramaphosa met with Business Leadership South Africa and his Eskom advisory panel to have what he described as a “thorough”conversation about ways to address Eskom’s operational challenges and their impact on the economy.
ANA