Citizen Reporter
3 minute read
29 Oct 2019
12:58 pm

Fixing Eskom will be harder than changing a tyre – Gordhan

Citizen Reporter

According to the minister, the appointment of a new CEO for the struggling utility will 'hopefully' take place tomorrow.

Minister of Public Enterprises Pravin Gordhan during the release of a Special Paper on Eskom, GCIS, Pretoria, 29 October 2019. Picture: Jacques Nelles

At a media briefing at which Minister of Public Enterprises Pravin Gordhan unveiled government’s highly anticipated Special Paper on Eskom, the minister tried to manage the nation’s expectations as far as how long it will take to fix the struggling energy utility.

“There is a belief among South Africans that fixing Eskom is like changing a tyre in a car or replacing a bolt in a boiler. We see the fixing of Eskom as a long protracted process,” he said.

The minister added that he hoped Eskom’s new CEO would be announced soon, and perhaps as early as Wednesday.

“The board has done its work, and a recommendation has been made. We are going through a government process,” he said, before saying the announcement would “hopefully” take place tomorrow.

Eskom’s chairperson, Jabu Mabuza, is currently also functioning as the utility’s acting CEO, a decision that has been criticised by the Economic Freedom Fighters (EFF) as well as unions including the National Union of Metalworkers of South Africa (Numsa).

Gordhan introduced his new paper by explaining that it details the future of Eskom, and that while some of this can take place “rapidly”, much of it will take place in a “slow, systematic and disciplined way”.

He stressed that the document signifies “the beginning of the process, not the process in its entirety”.

He also attempted to distance himself from taking sole responsibility for the plan. “It’s not Gordhan’s plan, many of you like to personalise these things,” he said.

READ MORE: Ramaphosa caught between a Gordhan rock and a Mabuza hard place

Regardless of whether it’s Gordhan’s plan or government’s as a whole, the minister said it’s ” clear that Eskom cannot remain as it is,” and that changing it will require the “participation of all stakeholders.”

Gordhan discussed how the transmission component will be separated as a functional subsidiary of Eskom holdings, as per President Cyril Ramaphosa’s plan to unbundle the state-owned-enterprise, announced during the state of the nation address in February.

The minister says the creation of “clusters” within the generational component of Eskom will allow “internal competition” and give consumers an opportunity to choose, in what appears to be an attempt to lessen the monopoly the government-owned entity has over South African power production, without resorting to privatisation.

According to the minister, Eskom’s main issue is quite simple – it’s spending more money than it’s making.

“The major problem is that Eskom’s cost structure is much higher than the revenue it is making from the sales of electricity,” he said.

Addressing the mountain of debt plaguing the utility, Gordhan said this cannot be dealt with “in its own right”, and that it was vital to show investors that there was a plan for Eskom.

He said they were launching a campaign to encourage people who could afford to pay for electricity to indeed do so, or face the consequences.

Government has described the Eskom special paper as a comprehensive roadmap for the struggling utility in a “reformed electricity supply industry”.

(Compiled by Daniel Friedman)

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