SMOKE rises from a coal-fired power station near Johannesburg. Deputy President David Mabuza said yesterday that Eskom, which has debt of R454 billion, could not be allowed to fail as it was at the centre of the country’s plan to ignite growth post-Covid-19. EPA
SMOKE rises from a coal-fired power station near Johannesburg. Deputy President David Mabuza said yesterday that Eskom, which has debt of R454 billion, could not be allowed to fail as it was at the centre of the country’s plan to ignite growth post-Covid-19. EPA

Eskom operations 'on the right track'

By Lyse Comins And Siyabonga Mkhananazi Time of article published Jun 26, 2020

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Durban - Deputy President David Mabuza has insisted that Eskom is on the right track despite its escalating debt, which is now at R454 billion, and says that the new coal-fired power plants, Medupi and Kusile ,will be completed this year and in 2023 respectively Mabuza also said they were cracking the whip on the provincial and national departments who owed Eskom billions of rand. 

Eskom is presently owed R28bn by municipalities. Answering questions in parliament yesterday, Mabuza said this was unacceptable and action would have to be taken.

He said Eskom could not be allowed to fail as it was at the centre of the country’s plan to ignite growth post-Covid-19.

Eskom had, in the past few months, been trying to stabilise its operations and ensure the supply of electricity.

He said attempts were being made to recover all the amounts owed to it by various entities.

“The current municipal debt reached R28bn as at March this year, which is an increase of R8.2bn in the past 12 months. We are directing departments and organs of state to settle the debt,” Mabuza said.

He said national and provincial departments must verify all the amounts owed to Eskom and settle their accounts.

Eskom was on track to complete Medupi and Kusile this year and 2023 respectively, and was now correcting identified structural defects.

“We said Eskom must speed up the build programme. We are happy that according to Eskom’s projections they must finish Medupi this year,” he said, adding that would bring additional capacity to the national electricity grid.

Eskom last night said it had successfully recovered four generation units that had broken down over the past few days, resulting in a much improved generation system.

“Our teams worked around the clock to return to service the units that had broken down at Kendal, Lethabo, Tutuka and Majuba power stations.”

It said while the system was in much better shape to meet demand over the next few days, it urged the public to continue managing consumption responsibly.

Responding to questions in Parliament this week, Public Enterprises Minister Pravin Gordhan said Eskom was at an “advanced stage” of the unbundling process.

“Business models for the divisions and corporate functions for the first phase of divisionalisation are at an advanced stage of competition,” he said. “A total of 8890 employees have been linked to the operating divisions, of whom 6500 are from head-office functions.

“The volume of staff enables the line divisions to function separately. Divisional managing directors have been appointed, divisional boards have been appointed, divisional board members for all three divisions of Eskom have already been meeting, and cash-flow statements and income statements are in place for the divisions,” Gordhan said.

He said the fact that the divisions would trade with each other would allow for better balancing and forecasting of predictive loads due to the penalties and benefits in the trading system.

“This approach is bearing fruit in also managing the possible risks and highlighting skills needed, and informing effective operations once unbundling occurs. As far as the legal separation is concerned, this will depend on regulatory and policy changes in the electricity industry and could possibly happen late in 2021.”

He said Eskom’s new business model would see more competition and less coal used during the next three decades, and an increase in the use of nuclear, gas and renewable power-generation, with energy being supplied by independent power producers.

“We have already had Eskom cluster the power stations into three clusters and they will have to compete with each other as Eskom’s generation plants and with the private-sector generation,” he said.

“There will be formidable changes taking place on the generation side of this business. Supply of electricity will be become more consistent, more predictable and more reliable over time because this is what a growing economy requires in terms of certainty and security of supply,” Gordhan said.

The Mercury

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