{"id":230199,"date":"2018-03-08T07:59:16","date_gmt":"2018-03-08T05:59:16","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=230199"},"modified":"2018-03-08T07:59:16","modified_gmt":"2018-03-08T05:59:16","slug":"our-cost-structure-is-definitely-not-right-eskom-chairman","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/energy\/230199\/our-cost-structure-is-definitely-not-right-eskom-chairman\/","title":{"rendered":"‘Our cost structure is definitely not right’: Eskom chairman"},"content":{"rendered":"

Africa\u2019s biggest power utility is reviewing its business, including staff numbers and possible asset sales, to find a way out of massive debt and develop a more sustainable model, according to its chairman.<\/p>\n

South Africa\u2019s state-owned Eskom Holdings SOC will hold a strategic session next week as part of an effort to address flaws that forced it to take a 5 billion rand ($422 million) loan for the month of February to maintain essential liquidity levels.<\/p>\n

\u201cOur cost structure is definitely not right,\u201d Jabu Mabuza, Eskom\u2019s chairman, said in Cape Town, where he attended a Bloomberg conference. \u201cWe have to have to help the organisation to be structured with people, assets, funding in a manner that is appropriate.\u201d<\/p>\n

Eskom\u2019s financial crisis stems from factors including weak demand, delinquent municipalities that don\u2019t pay their bills and allegations of graft.<\/p>\n

The utility bought itself some breathing room this month by signing a R20 billion short-term credit facility with a group of banks, but the issues remain.<\/p>\n

Mabuza was appointed chairman in January as part of an overhaul of the board as President Cyril Ramaphosa rose to power, promising better management of state-owned companies and a crackdown on corruption.<\/p>\n

The business needs to\u00a0address\u00a0\u201cunacceptable\u201d debt-to-equity ratios, which are above 70% compared to the benchmark of around 50%, Mabuza said. It needs to look at disposing non-core assets, including a housing company it owns.<\/p>\n

\u201cWhen you don\u2019t have money you need to look at anything that is of value that you can sell,\u201d he said.<\/p>\n

Renewable Power<\/strong><\/p>\n

The utility must to agree on a price path for renewable power from independent producers, he said. A government program to diversify South Africa\u2019s energy mix has been held up for more than two years since Eskom refused to sign agreements allowing the projects to progress.<\/p>\n

\u201cWhether it is human or office, everything needs to be looked at\u201d in terms of cost, Mabuza said.<\/p>\n

He declined to give a target for how much the utility should reduce its current number of almost 42,000 employees, but said it will also be reviewed.<\/p>\n

\u201cBenchmarked against our peers globally, Eskom is definitely employing too many people,\u201d he said.<\/p>\n

\"\"<\/a><\/p>\n

\n

Read: S&P downgrades Eskom over insufficient government support<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa\u2019s biggest power utility is reviewing its business, including staff numbers and possible asset sales, to find a way out of massive debt and develop a more sustainable model, according to its chairman.<\/p>\n","protected":false},"author":59,"featured_media":89420,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9874],"tags":[1164,26],"class_list":["post-230199","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-eskom","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/230199","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=230199"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/230199\/revisions"}],"predecessor-version":[{"id":230213,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/230199\/revisions\/230213"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/89420"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=230199"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=230199"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=230199"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}