Eskom trapped in the darkness of debt

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Eskom's financial situation will remain dire for the next few years with a risk its debt burden would grow from R400 billion to some R550 billion in the foreseeable future.

That is according to the chairman Phakamini Hadebe who briefed the Parliament's portfolio committee on public enterprises on Wednesday.

He said the institution was under severe financial strain.

Acting CFO Calib Cassim said the problem was partly the company's inability to service its debt from its earnings, forcing it to borrow more.

He said Eskom hoped that its expenditure levels would stabilise within the next three years once its new build power plants were completed but the picture was further clouded by the need for backlog maintenance.

Eskom is implementing a nine-point strategy to deal with backlogs and declining availability on energy. There is no need for load-shedding in the immediate future even though planned maintenance work would see 59 planned outages.

Current situation

• The company's energy availability would dip to around 72-73% before the financial year was out and that it would continue to rely on diesel as an additional fuel source as coal level remains at crisis point.
• Eskom will burn diesel until March. The cost of diesel from April came to R538 million and could reach R1 billion by the end of the year.
• 10 power plants had coal stock levels of less than 20 days, and of those half had less than ten days worth of coal.

Hadebe explained how the current coal crisis was triggered by the company's notorious coal supply deal with Tegeta Exploration, saying by the time it became apparent that Tegeta was unable to deliver even half the amount of coal stipulated by its contract, Eskom's relationships with its old suppliers, who had been alienated in the rush to sign the Gupta-linked company, had broken down.

- African News Agency (ANA)