JOHANNESBURG – The government plans to establish a technical operations and maintenance review team for Eskom in its latest attempt to resurrect the embattled utility whose debt was the main driver of the wider deficit targets announced in the national Budget.

Eskom reported yesterday that the risk of load shedding remained high and that this would continue over the weekend.

A Cabinet statement said that the government would team up with the Minerals Council South Africa (MCSA) and the Engineering Council of South Africa (Ecsa) to find solutions to Eskom's operational challenges and technical capacity and capability bottlenecks.

The government said it had decided to form the team after the special Cabinet committee on Eskom headed by Deputy President David Mabuza met with MCSA and Ecsa.

“The coal mining industry was convened under the auspices of the MCSA and the meeting raised problems related to coal supply, costs and pricing, and the quality of coal provided to Eskom,” the Cabinet said.

“The Ecsa gave its analysis of the problems facing Eskom and provided a set of recommendations about how to involve the broader South African academic and technical professional fraternity in the urgent interventions required to stabilise electricity supply.”

The Cabinet statement said Minister of Public Enterprises Pravin Gordhan and Eskom board chairperson Jabu Mabuza had their first preliminary engagements with the leadership of the three labour unions recognised by Eskom.

“The restructuring of Eskom was also discussed, and all parties agreed that there would be more interactions to better understand the roadmap and the implications of separating Eskom’s business divisions into three separate operating entities.”

However, the labour movement remains sceptical of plans to restructure Eskom. Cosatu spokesperson Sizwe Pamla said the federation remained opposed to the unbundling of Eskom into three different entities.

“We, therefore, demand that the corporatisation of Eskom and current attempts to privatise its assets must be stopped. We are still very angry about the government signing an agreement with the renewable energy independent power producers,” Pamla said.

Eskom last month rolled out devastating blackouts, which culminated in 4000 megawatts not reaching the grid, after six of its generating units unexpectedly went off-line.

This led to a turnaround in the rand from one of the best-performing emerging markets currencies in the month to the worst. It was bid at R14 to the dollar by 5pm yesterday.

In December President Cyril Ramaphosa appointed a task team to tackle Eskom’s woes. The work of the task team resulted in the government taking an unprecedented step to break up Eskom into three separate entities focusing on distribution, transmission and generation.

The National Treasury last week provisionally set aside R150billion over a 10-year period to keep the utility afloat. Over the next three years, the government will fund Eskom to the tune of R69bn.

Jonah Rosenthal, a senior analyst at the Institute of International Finance, said the restructuring plan for Eskom included selling off some of its assets and reducing the number of staff, which would likely lead to resistance from labour unions.

“As a result, there is a significant implementation risk around the reorganisation plan, which could lead to Eskom needing further financial support in excess of the three-year, R69bn amount set aside in the 2019 Budget,” Rosenthal said.

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