JOHANNESBURG – President Cyril Ramaphosa on Wednesday said that government was taking necessary steps to address challenges faced by Eskom as it remained an albatross around the country's neck.
Ramaphosa was speaking at a breakfast meeting with TeamSA.
The troubled state-owned power utility is facing a myriad of challenges, including escalating overhead costs, low-quality coal stockpiles, corruption, and low revenues as on Tuesday the energy regulator began public hearings on its 15 percent annual tariff hike over the next three years.
Late last year, Ramaphosa appointed an eight-member sustainability task team to advise the government on actions to resolve Eskom’s operational, structural and financial challenges. Eskom is a critical component in running the South African economy as it produces more than 90 percent of the country's electricity supply.
"We are confronted by the Eskom challenge again, but this time we are taking measures to address it. We will not carry that burden with us to Davos. We have appointed a task team, I met with it yesterday, and they have made a number of proposals on how we should restructure Eskom," Ramaphosa said.
"There is a glimmer of light at the end of the tunnel as to what we need to do to stabilize Eskom. We can safely say that Eskom is being handled and we will eventually put its challenges aside."
Ramaphosa will lead a delegation of government, business and labour leaders to the World Economic Forum (WEF) taking place next week in Davos, Switzerland.
He said that government was stabilizing a number of institutions by engaging in the process to appoint credible heads of these organisations, such as the National Prosecutions Authority and the South African Revenue Services while continuing with its fight against corruption.
Ramaphosa also said that the collaboration between government and business was bearing fruit, and that had been evident when business pledged around R290 billion to the economy during last year's inaugural Investment Conference.
"One of the things we did was to bring with business. Collaboration between government and business is going extremely well and it is at an extremely rich level. We are addressing challenges and identifying areas of strengthening our economy," Ramaphosa said.
"I was delighted to see so many corporations being positively-minded about the South African economy and building on that momentum, not only for international investors but locally as well. Our journey to Davos is to strengthen relations and garner foreign investment. South Africa is recognised as a key player at WEF and we need to be seen as key contributor in this space."