Eskom, which supplies about 95% of South Africa\u2019s power and is reliant on government bailouts to remain solvent, is set to announce its second consecutive multi-billion rand annual loss on Tuesday. The big question is: How many billions?<\/p>\n
The state-owned utility forecast in January that its loss would widen to about R20 billion ($1.4 billion) in the year through March, from R2.3 billion the year before.<\/p>\n
But Anton Eberhard, who sits on a government team that\u2019s advising on a rescue plan for Eskom, told a conference in Lisbon last month the shortfall would be at least R25 billion.<\/p>\n
Either way, the loss would be a record for a state company, eclipsing the R14.6 billion state oil and gas company PetroSA burnt through in the year through March 2015 after a massive asset writedown.<\/p>\n
The utility\u2019s precarious financial state has now become a national problem, with the government giving it a R128 billion bailout over the next three fiscal years to keep operating.<\/p>\n
Eskom has been struggling to produce enough power to meet demand from its aging coal-fired plants, and two new ones currently under construction are running years behind schedule and way over budget.<\/p>\n
The utility isn\u2019t generating enough cash to service both its interest and debt repayments, despite having secured tariff increases of more than 500% since 2007, according to Eberhard, a professor at the University of Cape Town.<\/p>\n
The release of the results may coincide with the announcement of a temporary replacement for outgoing Chief Executive Officer Phakamani Hadebe, who leaves at the end of the month.<\/p>\n
The utility may also get a new chief restructuring officer, who will help reorganize its debt and oversee the process of splitting it into generation, transmission and distribution units.<\/p>\n
Eskom revealed in May that it owed R440 billion at the end of March, R273 billion of which was government-guaranteed.<\/p>\n