Public Enterprises Minister Pravin Gordhan said Eskom’s new turnaround document was the beginning of government’s plan to reposition the embattled entity, and suggestions that privatisation is on the cards is “fake news.”
Gordhan on Tuesday released the so-called special paper on Eskom with plans to reform the struggling state-owned power utility.
The release of the paper has been eagerly anticipated by investors and ratings agencies who have stated that the financial and operational crisis at the power utility as one the biggest threats to South Africa’s economy.
Gordhan said a number of measures would be put in place, including separating parts of the power utility’s transmission.
The three arms – distribution, transmission and generation – will all remain functional subsidiaries of an Eskom holding company, said Gordhan.
“…And we hope that by January or so, next year, some of the physical changes that need to be made will all have been made. Our ultimate deadline for the functional separation of transmission at the outside is 31 March 2020.”
Gordhan did not elaborate on how Eskom plan’s to relieve itself of its debt burden of R450bn, saying Finance Minister Tito Mboweni would provide more information on this when he presents his medium-term budget Wednesday.
He did say though, that the timeframe for the utility’s debt – now at 15% of SA’s GDP – cannot be a “couple of years.”
“Monopolies by their nature are wasteful,” he added, “in both the private and public sector.”
Gordhan said it is “not sustainable for the economy that tariffs have gone up 500% over past 10 years.”
The minister said government will soon launch a campaign to get the public to pay for electricity.
The utility is owed about R25.1bn in payments from municipalities.