Cape Town - Public Enterprises acting director general Thuto Shomang said Eskom's current debt stands at R435 billion, which represented 15% of South Africa's sovereign debt.
"Default is threatening the economy," Shomang said while briefing the public enterprises portfolio committee on Wednesday.
Shomang also said cash generated by the entity did not cover operating and servicing costs.
He said the escalation of municipal and Soweto debt totalling R28 billion was growing at R1 billion a month.
"The number of employees increased from 32 000 in 2007 to 48 000 in 2018 with associated costs growing from R9.5 billion to R29.5 billion over the period," Shomang said.
Shomang also said Eskom was struggling to maintain operational sustainability with its ageing generation fleet on average about 37 years.
There has been no implementation of essential mid-life refurbishments and the poor quality of maintenance due to poor workmanship with at least 40% of plant breakdowns due to human errors, he said.
Shomang also said there wwere also on-going coal shortages due to poor management and lack of investment in cost plus mines, as well as significant loss of critical skills and low staff morale.
He also told the MPs that Medupi and Kusile plants have suffered massive delays and cost overruns due to poor planning, poor engineering designs, poor procurement practices and corruption.
"The costs for the plants have escalated significantly to over R300 billion; Medupi from R24.9 billion to R145 billion and Kusile from R80.7 billion to R161.4 billion," Shomang said.
He also said Eskom has experienced systematic corruption, malfeasance and fraud. He added that state capture has compromised the credibility of the organisation and eroded investor confidence.
"The resultant effect of these corrupt transaction is the pass-through to the consumer and the shareholder."
Earlier Shomang said Eskom is technically insolvent and at the current rate it will have problems beyond April to fulfil its objectives
He told the parliamentarians that Eskom needed to find a new business model in line with President Cyril Ramaphosa's announcement last week.
Ramaphosa had announced in his State of the Nation Address that Eskom would be unbundled into three entities that will be responsible for generation, transmission and distribution.