Picture: Mike Hutchings/Reuters/African News Agency (ANA)
Picture: Mike Hutchings/Reuters/African News Agency (ANA)

Eskom will cease to exist without government bailout, MPs hear

By Chantall Presence Time of article published Feb 13, 2019

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Parliament - Eskom was technically insolvent and would cease to exist in April this year without a bailout from government, MPs were told on Wednesday.

Government officials were briefing Parliament's public enterprises portfolio committee on the state of the power utility, which is in crisis mode at the moment as a result of power plant outages which have led to rotational load shedding and electricity cuts.

Acting public enterprises director general Thuto Shomang said the current crisis followed years of mismanagement, corruption, and bad decision-making, among a host of other failures.

Shomang presented MPs with a diagnostic of the operational and financial crisis the power utility finds itself in.

He said the cash generated at the utility was not covering operating and debt servicing costs, the headcount had increased from 32,000 to 48,000 between 2007 and 2018, with the associated costs growing from R9.5 billion to R25.9 bln, while municipal debt was growing at around R1bln a month.

On the operational side, an ageing generation fleet which has not been properly maintained, coupled with design flaws at the two newest coal-fired power stations - Medupe and Kusile - which are only operating at 40 percent capacity, has exacerbated the situation, leading to the outages and resultant power cuts.

African News Agency/ANA

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