Eskom unbundling will be 'just', 'sustainable': Public Enterprises gives update | Fin24
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Eskom unbundling will be 'just', 'sustainable': Public Enterprises gives update

Aug 24 2019 12:38

Eskom's Chief Restructuring Office has begun its work, and the power utility has started implementing key recommendations of the technical review team to ensure power stations remain operational.

This is according to a statement from the Department of Public Enterprises (DPE) issued on Saturday morning, which stressed the importance of Eskom to the keep the country's economic engine running.

Bloomberg previously reported that even marginal economic growth could trigger further load shedding, according to at least one energy expert.

The DPE's statement, which gave a brief update on the status of interventions at Eskom, comes as Minister in the Presidency Jackson Mthembu told reporters earlier in the week that Cabinet expected to receive a paper detailing Eskom's outlook by Cabinet's next meeting in September. The paper details matters such as the unbundling and breaking down of the power utility.

Power generation, coal supplies

The restructuring of Eskom has started with the creation of a transmission entity, in line with recommendations by the Presidential Sustainability Task Team, the statement said.

About 200 technical and engineering staff will be deployed across power stations, with power station managers overseeing maintenance and managing coal supplies.

"Eskom is also implementing some of the key recommendations of the Technical Review Team to ensure power stations operate at optimal levels," it said.

Reiterating President Cyril Ramaphosa's assertion that the ailing power utility was "too big and important" to fail, the department said the country's "economic performance is reliant on Eskom providing reliable and sustainable supply of electricity".

"The lesson is clear: for growth, we need a reliable and sustainable supply of electricity," it added.

The update did not go into details regarding the timeline. It has also been reported that the unbundling of Eskom could take three to five years.

Bailouts and unbundling

Eskom has received a total of R128bn in support from government over a three-year-period. "The funding was conditional upon the establishment of the Chief Restructuring Office (CRO) headed by Mr Freeman Nomvalo, that would deal with the power utility’s debt and interrogate various proposals to resolve Eskom financial challenges," said the DPE.

According to the statement, the CRO has begun its work and "a number of options" to resolve Eskom's debt and financial position is being evaluated.


Ramaphosa and Public Enterprises Minister have had initial talks with unions, the statement added, which are expected to be ongoing.

The paper on Eskom's outlook would be forthcoming within the next few weeks, the DPE confirmed, and would reflect a "urgent work" to put Eskom on a sustainable path, as well as a "just transition" during unbundling, which would have minimal impact on jobs.



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