Andre de Ruyter, chief executive of state-owned power utility Eskom, speaks during a media briefing in Johannesburg
Andre de Ruyter, chief executive of state-owned power utility Eskom, speaks during a media briefing in Johannesburg

Eskom boss sets target of 18 months to end load shediding

By Siphelele Dludla Time of article published Feb 2, 2020

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JOHANNESBURG - Newly-appointed Eskom group chief executive Andre de Ruyter has set himself a target of 18 months to end the country’s persistent load shedding and ramp up the utility’s maintenance programme.

In his first media engagement on Friday since his appointment last year, de Ruyter said Eskom would now revert back to the original so-called “philosophy maintenance” to refurbish its ageing coal-fired power stations.

De Ruyter said Eskom had neglected scheduled maintenance as required, and those legacies were now causing the power utility to have unreliable equipment.

He said that earlier this week, the Eskom board greenlighted a comprehensive maintenance plan.

“Essentially what it entails is that instead of deferring scheduled maintenance,” de Ruyter said, “instead of postponing general overhauls and midlife overhauls, we intend to return to the cycle of maintaining our plants as per the original original equipment manufacturers guidelines.”

A businesslike de Ruyter warned however that the country should brace itself for an increased probability of load shedding over the medium-term.

“This is something that is going to be carefully planned,” he said. “We are going to develop a fully-fledged plan. Part of that plan is also to make sure that we are able to buy electricity from those entities that have excess electricity. We will also increase our demand management system.

“We anticipate the maintenance programme will go on for about a period of 18 months.”

Eskom has been battling with unplanned breakdowns as many of its near-end term power stations have been poorly maintained, plunging the country into darkness and impacting productivity.

As part of restructuring its business, President Cyril Ramaphosa announced during his February 2019 State of the Nation Address that Eskom would be unbundled into generation, transmission, and distribution units.

De Ruyter said board members for each of the three units would be appointed by the end of the week as Eskom forged ahead with the unbundling programme.

He said the company had to deal with the legal factors that needed to be considered, including tax implications, and asset management, as well as labour relations matters.

The power utility currently has a debt north of R453 billion, and expects to report losses of about R20 billion this financial year.

De Ruyter said that Eskom had to look at its debt maturity profile urgently as it had a significant interest charge on income statement and could increase if the country's sovereign debt is downgraded.

He said Eskom’s primary objectives during his tenure would be to achieve operational stability, improving the income statement, addressing the balance sheet, addressing corruption, and carrying out restructuring.

De Ruyter said Eskom could rely on continuous bailouts as a way forward, but had to be fixed operationally and financially, and run it like a business.
“We have also had various engagement with the shareholder and with the National Treasury and I have found both very supportive and engaging in our endeavour to restructure the balance sheet,” he said.

“But it is clear that we cannot expect continued injections of equity until and unless we demonstrate that we will use the funds made available to us wisely."

BUSINESS REPORT 

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