Eskom privatisation is 'fake news' - Gordhan | Fin24
 
  • Pioneer

    Allan Gray was an investment disruptor who brought change to young South Africans.

  • Job Losses

    Government wants ArcelorMittal to sell its Saldanha Bay plant, rather than shut it down.

  • Ferial Haffajee

    South Africans are a cynical lot. Are we are missing that the business investment strike is over?

Loading...

Eskom privatisation is 'fake news' - Gordhan

2019-10-29 11:54

The minister of public enterprises released a turnaround document on govt plans to fix Eskom, a day before Tito Mboweni presents the medium-term budget.

Minister of Public Enterprises Pravin Gordhan.
LIVE NEWS FEED

Jump to
bottom

Last Updated at 23:17
29 Oct 16:19

Eskom is aiming to complete the unbundling of its generation, transmission and distribution operations by December 2022, according to a new policy roadmap published by Minister of Public Enterprises Pravin Gordhan. 

Read what the minister announced at a media briefing in Pretoria on Tuesday below. 


29 Oct 13:32

The minister has brought the briefing to a close. The focus will now shift to what announcements Finance Minister Tito Mboweni makes on Wednesday afternoon about funding Eskom when he delivers the mini budget. 

Gordhan did not delve into how Eskom can relieve itself of its debt burden of R450bn, saying Mboweni would provide more information on this. He did say, however, that the issue of debt must be resolved soon.  

Mboweni will be presenting the medium-term budget policy statement in Parliament in Cape Town on Wednesday afternoon. 


29 Oct 13:25

29 Oct 13:24

29 Oct 13:24

The minister again returns to the point that administered prices - such as electricity - are too high. 

"There are high levels of inefficiency," he says. He adds that freight and port charges are also too high. 


29 Oct 13:21

29 Oct 13:13

29 Oct 13:12

29 Oct 13:10

He says the timeframe to resolve the utility's debt cannot be a "couple of years". He says it needs to be sooner than that. 

He notes that Treasury will on Wednesday give more information on the utility's debt, which is now at 15% of SA's GDP. 

"Monopolies by their nature are wasteful," he adds - in both the private and public sector. 

 

29 Oct 13:06

Gordhan reiterates that the power utility has to deal with its crisis and work on a new business model at the same time. 

"The change process and the crisis management process need to work together." 

He comes back to what he calls the key principle: cost-effective electricity for consumers. 

He says it is not sustainable for the economy that tariffs have gone up 500% over past 10 years. 


29 Oct 13:02

29 Oct 13:01

29 Oct 13:00

Gordhan brings his presentation to a close, says Eskom cannot remain as it is and must shift to a new business model. 

There will now be an opportunity for questions. 

 

29 Oct 12:59

Gordhan says REIPP contracts will be reviewed but did not provide much additional information. REIPP stands for Renewable Energy Independent Power Producer Procurement Programme.


29 Oct 12:55

He says there will not be too much focus on unbuding the distribution arm of Eskom at the moment, due to the complexities of how it would work. 

"There is a big more study that we need to do," he says. 

The three arms - distribution, transmission and generation - will all remain functional subsidiaries of an Eskom holding company. 


29 Oct 12:52
The minister is now taking the media through slides outlining plans to put the debt-laden entity on a solid footing. 

29 Oct 12:52

29 Oct 12:50
Gordhan says a campaign to get the public to pay for electricity will be rolled out. The utility is owed about R25.1bn in payments from municipalities. 

29 Oct 12:47

29 Oct 12:46

29 Oct 12:44

Gordhan, speaking about clean energy, said it would cost up to R200bn to retrofit SA's coal-fired power plants with clean technology. He says Eskom does not have money to do this

He says Eskom has started to "incrementally" install clean coal technology. 


29 Oct 12:42

He adds that investors want to see the government has a plan for Eskom The utility has about R450bn of debt. 

He notes that the state will meet with lenders in the future. 


29 Oct 12:41
Gordhan notes that Minister of Finance Tito Mboweni will provide an update on bailouts and the status of government financial support for Eskom when he delivers his mini budget on Wednesday afternoon. 

29 Oct 12:40

29 Oct 12:39

The minister notes that the plan released today should be read in conjunction with the state's long-term energy blueprint, released 10 days ago.

  

29 Oct 12:37

Gordhan says damage that state capture caused within Eskom is "huge" and "systemic". 

He said it is more than stealing "a few billion". 

He says skilled people, particularly black professionals, were chased out of Eskom. 

This all resulted in a negative impact on the power utility. 



29 Oct 12:34

29 Oct 12:34
Energy expert Chris Yelland notes that Gordhan may announce Eskom's new CEO during his address today. 

29 Oct 12:31
Gordhan announces that transmission will be separated out. But it will remain under an Eskom holding company. This was previously announced by President Cyril Ramaphosa in his State of the Nation Address in February. 

29 Oct 12:28

29 Oct 12:27

29 Oct 12:25

Gordhan notes there has been a movement away from fossil fuels and towards clean energy. He says he will introduce the concept of a "just transition" on Tuesday. 

He notes the paper to be presented includes input from multiple government departments, as well as from Eskom and others. 


29 Oct 12:24

He says the paper being released on Tuesday is to answer the question around how to again put Eskom on a solid financial and operational footing. He notes that Ramaphosa has previously said the debt-laden power utility cannot trade its way out of trouble. 


29 Oct 12:22

Gordhan notes that President Ramaphosa has previously said that Eskom is too big to fail, and government will take responsibility to fix it, including its finances. 


29 Oct 12:16
Gordhan has arrived and the briefing is expected to start soon. 

29 Oct 11:54

Eskom was forced to institute load shedding two weeks ago, which it blamed on boiler leaks and the breakdown of a conveyor belt transporting coal to Medupi power station.

This, it said at the time, was exacerbated by delays in returning units that were on planned maintenance to service, as well as low diesel and water stocks. The utility said on Monday that, while generating plant performance has improved, an unexpected shift such as an increase in unplanned breakdowns could result in load shedding at short notice.


29 Oct 11:54

The Minister of Public Enterprises, Pravin Gordhan, will at midday on Tuesday release government’s long-awaited Special Paper on debt-laden power utility Eskom.

The release of the paper comes a day before Minister of Finance Tito Mboweni will present the medium-term budget, and 10 days after the publication of the Integrated Resource Plan, the state's long-term plan for electricity generation.

Gordhan's office said on Monday that he will set out in detail a comprehensive roadmap for Eskom in a "reformed electricity supply industry". Gordhan is expected to give more information about plans to split Eskom into three entities: generation, transmission and distribution. 


Jump to
top

 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote

Loading...