Special paper on Eskom restructuring, sustainability to be published soon
Johannesburg - Government will publish a special paper on Eskom which will clearly outline the roadmap to put Eskom on a long-term sustainability path within the next few weeks, the public enterprises ministry said on Saturday.
"This paper will reflect the urgent work that is taking place to identify options to resolve the debt challenge, the process for restructuring Eskom and importantly, to ensure a just transition," the ministry said in a statement.
Eskom was a key institution in the energy sector and a critical component of the South African economy. The country’s economic performance was reliant on Eskom providing reliable and sustainable supply of electricity, it said.
"The lesson is clear: for growth, we need a reliable and sustainable supply of electricity. President [Cyril] Ramaphosa during his state of the nation address in February 2019 announced that Eskom is too big and important for government to let it fail. The president announced the restructuring of Eskom into three entities, starting with the creation of a transmission entity."
This was a recommendation of the Presidential Sustainability Task Team based on both international trends and a study conducted by Eskom and in line with government policy as outlined in the White Paper on Energy 1998.
Eskom was also implementing some of the key recommendations of the technical review team to ensure power stations operate at optimal levels.
Stabilisation of generation was also critical. To ensure operational discipline, Eskom would deploy about 200 technical and engineering staff across the power stations. Power station managers would play a critical role to ensure proper maintenance and adequate supply of quality coal.
"To ensure Eskom is able to meet its financial obligations, the Minister of Finance [Tito Mboweni] announced an Eskom support package of R23 billion for the next three years during the budget speech. Furthermore, the minister tabled the Special Appropriation Bill to provide Eskom additional support of R59 billion. The additional support (R23 billion over three years add to 2019/20: R26 billion and 2020/21: R33 billion) brings the total amount to R128 billion over a three year period," the ministry said.
The funding was conditional upon the establishment of the chief restructuring office (CRO) headed by Freeman Nomvalo, that would deal with the power utility’s debt and interrogate various proposals to resolve Eskom's financial problems.
Nomvalo had already started work. A number of options to resolve the debt and financial position was being evaluated by a team of experts. The key component of restructuring was the separation of transmission. Since the announcement of the separation, government, in particular the president and Public Enterprises Minister Pravin Gordhan, had had initial engagements with unions.
The consultations on the future of Eskom were expected to be ongoing at Eskom management level and government level. The Eskom board and executive management, together with government, would lead engagements at various levels.
"The energy sector is going through a global transition driven by new technologies and environmental concerns. It is critical that the transition is just, in that it must have a minimum impact on jobs and local economies. Government will ensure that appropriate consultations will occur in particular with organised labour and other stakeholders on the position paper and the implementation of the separation project of Eskom," the ministry said.
African News Agency (ANA)