Government to consider splitting Eskom: report
Government officials will meet in the coming days to debate whether to break up state power firm Eskom to make it financially viable, reports Reuters.
Speaking at a conference on Tuesday (29 January), public enterprises minister Pravin Gordhan said that Eskom’s fate will be debated at a cabinet meeting starting on Wednesday.
“Should Eskom be unbundled into generation, transmission and distribution, as is the worldwide practice?
“That is a debate we are going to have soon. And it is going to go beyond a debate because we need very fast movement,” he said.
Gordhan added that the government would be willing to sell stakes in state firms such as Denel and South African Airways to private investors “once we get to a level of stability in some of these outfits”.
“The fiscus doesn’t have space for endless bailouts,” he said.
Questioning survival
Eskom aid earlier this week that its distressed financial position and rising municipal debt poses a risk to its sustainability.
Rising municipal debt, coupled with Eskom’s poor financial and operational performance pose a systemic risk to the sustainability of the company, said chief financial officer, Calib Cassim.
Speaking at the Nersa public hearings to deal with Eskom’s three-year tariff application in Bloemfontein, Cassim said the ballooning municipal debt, together with the rising Soweto debt, are no longer just an Eskom problem alone.
“What is clear is that Eskom cannot solve financial and operational sustainability challenges that it faces alone.
“The turnaround of Eskom is a journey over time that is highly dependent on the active involvement of the shareholder, Nersa and other stakeholders including customers,” said Cassim.
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