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Gordhan on Eskom: No room for 'endless bailouts'

Jan 29 2019 20:54
Tehillah Niselow

The fiscus does not have room for "endless bailouts", Public Enterprises minister Pravin Gordhan has said. 

The minister was speaking at a panel discussion at the Business Economic Indaba in Midrand on Tuesday.

Gordhan spoke frankly about the state some public enterprises find themselves in "especially the major ones…like Eskom who were at the heart of state capture".

He said the power utility, which has R419bn in debt, will undergo a "major restructuring exercise", adding that the "fiscus doesn’t have the space for endless bailouts, that’s the reality".

"Should Eskom be unbundled …it’s going to be a debate we have soon and it’s going to be beyond a debate as we need very fast movement if we’re going to have Eskom as a credible entity, both operationally and financially, even in a month’s time, but you’ll hear about this in due course," Gordhan said.

ANC treasurer-general Paul Mashatile said in July 2018 that the party is considering splitting the power utility into three units, generation, transmission and distribution.

Gordhan added the Eskom task team found that 40% of the breakdowns at the power giant are due to the human factor, while he believes the figure is more than 50% and it is unclear whether these are accidental or intentional.

Eskom began load shedding in November and December citing major operational issues. The uncertainty of the power supply has been cited as a key risk factor by ratings agencies and international financial institutions for 2019

Gordhan said due to "state capture", good people at SOE’s either left or were kicked out and the parastatals became operationally weak.

The Eskom task team will submit its preliminary report on a turnaround plan by the end of January.

* This story has been updated to reflect that it was Public Minister Pravin Gordhan who spoke on Eskom and not Finance Minister Tito Mboweni who spoke earlier at the same event.

eskom  |  budget2019  |  budget 2019  |  tito mboweni  |  soes  |  bailouts  |  budget
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