Johannesburg - Power utility Eskom on Tuesday said that it would review thousands of contracts as well as emergency procurements made over the past two years in its bid to claw back some of the monies that have been swindled from the company.
Eskom has of late been plagued by scandals of dodgy contracts which have defrauded the power utility of millions of rand, including a R1.6 billion payment unlawfully made to Trillian Capital and global consultancy McKinsey.
The power utility reported on Tuesday that its revenue for six months ending 30 September 2017 fell by two percent to R96 billion and cash from operating activities dropped 30 percent to R22 billion, with level of debt over R300 billion.
Eskom's liquid assets had declined to R9 billion from R30 billion a year previously due to tariff increases of only 2.2 percent and a 1.9 percent decrease in electricity sales volumes, offset by cost containment measures.
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Eskom acting chief financial officer, Calib Cassim, said that the company's 2016/17 financial statements were qualified based on completeness of irregular expenditure reported in terms of the Public Finance Management Act.
Cassim said that a recovery plan, monitored by board audit and risk committee, was in place to review 160 contracts over R1 billion and 5,110 contracts under R1 billion. These contracts respectively represent at least 80 percent of contracts that Eskom has with contractors.
Cassim said that while interim results were released after a lengthy delay, there was a concern on utility's liquidity as a going concern with investors and its auditors, SizweNtsalubaGobodo, were concerned that Eskom was not profitable.
"We remain positive that with the co-operation of the relevant participants, the funding plan can still be executed, albeit under challenging conditions. This will strengthen our liquidity and propel us towards positive cash flows," Cassim said.
"We are committed to ensuring an improvement of our liquidity levels and restoring the positive lender and investor sentiment to unlock access to the markets."
Cassim said that given the progress, funding was expected to be unlocked, although it would take time to improve the situation, adding that Eskom's operating model and capital structure would be reviewed later.