Eskom's skeletons to be revealed? 10 things to look out for in the financial results | Fin24

Eskom's skeletons to be revealed? 10 things to look out for in the financial results

Jul 23 2018 06:00

Hard-pressed power utility Eskom is set to release its 2017/18 financial results on Monday and may possibly shed light on corruption.

Eskom already indicted that it was aware of ongoing reportable irregularities and irregular expenditure linked to tender processes, it announced in a statement that was released ealier this month on the JSE's news service.

"If the government or President [Cyril] Ramaphosa are serious about slaying corruption, then this is where the investigation needs to begin", said energy expert Ted Blom, who is also a partner at Mining & Energy Advisors.

He pointed out that some of Eskoms's skeletons that may surface in Monday's results:  

1. The approximately R30bn in derivative losses emanating from the Gupta capture of Eskom treasury;

2. The approximately R50bn in contractors claims on capital build;

3. The approximately R500bn in asset overvaluation directly attributable to the high tariff regime currently prevailing;

4. The overvalued coal stocks and continuing corruption in coal procurement of around R8bn per annum;
5. The overstaffing and capitalised salaries relating to the 30 000 overstaffed employees;

6. The continuation of the questionable Eskom "phantom bonus scheme" which milks millions of rands annually in favour of already over remunerated senior employees;

7. Further breakdowns in plant availability due to poor maintenance and poor quality coal;
8. Inflated coal costs resulting from road transport costs from Medupi;

9. Increasing burden on Eskom as a consequence of corruption;

10. Questionable contracts on renewables that force the utility to pay for electricity at a higher rate than Eskom’s costs and which decimate Eskom’s sales and ability to service debt.

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