Eskom warns of load-shedding risk
State power utility Eskom has warned of the risk of load-shedding on Monday, Reuters reported, citing constraints due to maintenance and unplanned outages at several of its electricity-generating units.
The power system was “severely constrained”, it said. “It’s mainly due to some units being offline, some for maintenance purposes and others because of unplanned outages,” said Eskom’s spokesman Khulu Phasiwe.
Fixing Eskom is arguably president Cyril Ramaphosa’s biggest challenge as he attempts to modernize South Africa, boost growth, provide jobs and overcome years of entrenched corruption, Bloomberg reported last week.
The company’s debts are climbing, it has a bloated work force, and sales are declining.
The utility has had 10 CEOs and six boards in the same period, and the new management has found around $1.5 billion in irregular expenditures, mostly involving procurement.
“It’s not generating enough cash to cover both its operating costs and its cost of capital,” said Anton Eberhard, professor at the University of Cape Town’s Graduate School of Business, in an emailed response to questions to Bloomberg.
“Eskom’s losses will increase this year unless they conjure up an accounting trick, sell off some non-core assets.”
Read: 4 graphs that show why fixing Eskom is Ramaphosa’s biggest challenge
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