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Eskom CEO: 30 companies must pay us back for poor workmanship

Mar 29 2019 12:52
Fin24

Eskom CEO Phakamani Hadebe says the power utility has identified some 30 companies which must pay it back for poor workmanship on power plants.

The shoddy workmanship is one of the reasons for Eskom's recent spate of load shedding. 

In an interview on the SABC on Thursday, Hadebe said, "It's important for South Africa to see results and people should be arrested ... [W]e have identified 30 companies that should pay us back, but we are not a law enforcement agency. That should be done by law enforcement agencies. We have done our research and we have put that on the table."

Hadebe did not provide details of who the 30 companies were.

What now for load shedding?

Talking about the current state of load shedding, he said the cash-strapped utility had managed to "cover a lot of ground" but the challenges were "severe". 

This is the first week that Eskom has not implemented load shedding, following several days of Stage 4 load shedding, which was also prompted, in part, by Cyclone Idai in Mozambique. At the time, the power shortage was so critical that Eskom continued to implement Stage 2 load shedding during the night.

"The challenge is unplanned breakdowns that we are currently experiencing," he said, meaning that this was over and above the other challenges that Eskom also faced - such as the failure of its new power plants to perform at the expected level.  

"But unplanned maintenance has decreased so that gives us a breather," he said.

Power plants 'exhausted'

Hadebe also reiterated that the reason for unplanned breakdowns was because the power plants were old and had not been subject to sufficient maintenance.

"We have exhausted these plants," he said.

Asked by the SABC host about who was to blame for the engineering issues related to the new plants, Hadebe said the ones responsible were "those who were involved at the beginning who brought these companies in". 

He said the present situation was like "taking a flight and then fixing it while it's in the air".

Hadebe did, however, acknowledge that when he and the new Eskom board first took over some 12 months ago, they should have prioritised maintenance then.

"If we knew then what we know now, maybe we should have prioritised that, but then there was no money at all."

'We need more money'

He said Eskom was presently in discussions with government for more money following the National Energy Regulator of SA's (Nersa) announcement on a lower than expected electricity tariff increase.

"We are facing balance sheet issues," he said, adding that while Eskom generated about R180bn in revenue, its costs were some R140bn while at the same time, it faced crippling debt.

"We are not going to be able to generate enough earnings that will allow us to service debt. The debt will continue to be a challenge," he said, adding that Eskom will most likely only be self-sufficient within three to four years. This, however, was dependent on whether discussions with government in terms of more money were fruitful.

"But that is on the financial side. On the operational side, we think that over the next 12 months we will be in a better position. To solve all our problems, it will take about two years or so."

To watch the full SABC interview, visit: https://youtu.be/9ZAu_zz5BM8

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