{"id":298826,"date":"2019-02-12T08:07:57","date_gmt":"2019-02-12T06:07:57","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=298826"},"modified":"2019-02-12T10:21:41","modified_gmt":"2019-02-12T08:21:41","slug":"eskoms-biggest-mistake","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/298826\/eskoms-biggest-mistake\/","title":{"rendered":"Eskom’s biggest mistake"},"content":{"rendered":"

On Monday (11 February), Eskom announced that it would be introducing stage 4 load shedding following the loss of seven additional power generating units.<\/p>\n

As large parts of the country were plunged into darkness, questions have been raised as to how the power utility has once again run into trouble.<\/p>\n

In an analysis<\/a> <\/strong>of the ongoing crisis, Rod Crompton, adjunct professor at the African Energy Leadership Centre at Wits Business School, said that Eskom has two major problems – its operating costs are too high, and it can\u2019t pay its debt.<\/p>\n

“It owes over R400 billion and does not generate enough cash to pay even the interest on its debt. It\u2019s reached the end of the road.<\/p>\n

“Eskom has been getting steep tariff increases in recent years but these have driven some customers off-grid and shut others down. Eskom\u2019s sales have been declining by about 1% per annum. The less it sells, the higher the tariff it wants, and the less it sells \u2013 the utility death spiral,” he said.<\/p>\n

Commenting on how the power utility reached this stage, Crompton said that the main cause of its troubles is its decision to build two of the biggest coal-fired generating plants in the world – Medupi and Kusile.<\/strong><\/p>\n

“These plants are running way behind schedule, they\u2019re over budget and the bits that are complete don\u2019t work properly,” he said.<\/p>\n

“They are probably the single largest disaster in South Africa\u2019s economic history.”<\/p>\n

Crompton added that state capture, corruption and poor management have led to overstaffing and neglected maintenance, resulting in constant breakdowns.<\/p>\n

Electricity theft, a culture of non-payment and defaulting municipalities have also deepened the crisis, he said.<\/p>\n

“Eskom needs to simultaneously reduce operating costs, increase tariffs and shed a big chunk of its debt.<\/p>\n

“There is no painless way for South Africans to deal with their Eskom crisis. And it can\u2019t wait until the national elections on 8 May 2019,” he said.<\/p>\n

\n

Read: How much it costs to get off Eskom\u2019s grid in 2019<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

As large parts of the country were plunged into darkness, questions have been raised as to how the power utility has once again run into trouble.<\/p>\n","protected":false},"author":10,"featured_media":298832,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[26,3439],"class_list":["post-298826","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-headline","tag-wits-business-school"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/298826","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\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=298826"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/298826\/revisions"}],"predecessor-version":[{"id":298894,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/298826\/revisions\/298894"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/298832"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=298826"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=298826"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=298826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}