President Cyril Ramaphosa. Picture: Phando Jikelo/African News Agency(ANA

Parliament - Government will soon table a special appropriations bill to ensure that a significant portion of the R230 billion in state funds earmarked for shoring up Eskom over a decade is released in the short term, President Cyril Ramaphosa announced on Thursday in his state of the nation address.

"For Eskom to default on its loans will cause a cross-default on its remaining debt and would have a huge impact on the already constrained fiscus," the president said. 

"We will therefore table a special appropriation bill on an urgent basis to allocate a significant portion of the R230 billion fiscal support that Eskom will require over the next 10 years, in the early years."

He said this was critical because the troubled power utility only had cash to meet its obligations until the end of October, and was too big and vital to be allowed to fail.

"The utility’s financial position remains a matter of grave concern."

Ramaphosa said the details of the special appropriations bill would be announced by Finance Minister Tito Mboweni shortly, while government would also announce a replacement for Phakamani Hadebe, who resigned as CEO of Eskom recently.

"He came in at a difficult time at Eskom and has done a great deal with the board, led by Mr. Jabu Mabuza, to stabilise the company." 

Ramaphosa said government would also "soon" appoint a chief restructuring officer who would be entrusted to reposition the company financially by closely scrutinising the balance between its revenue, debt and cost structure.

He said the company was working with government to address the vast debt owed to it by municipalities and households and signalled that there would be no indulgence for non-payment.

"Failure to pay endangers our entire electricity supply, our economy and our efforts to create jobs. The days of boycotting payment are over. This is now the time to build; it is the time for all of us to make our own contribution."

Eskom's own debt is edging towards R500 billion, of which R350 billion is guaranteed by the state.

African News Agency/ANA