The Eskom board has agreed to bring in external engineers and auditors to get to the bottom of the crisis at the utility, says public enterprises minister Pravin Gordhan.
Speaking in parliament on Tuesday during the debate on President Cyril Ramaphosa’s state of the nation address, Gordhan said Eskom faced massive problems of a structural, operational and financial nature.
On Monday, the deeply indebted utility, which supplies more than 95% of SA’s electricity, took 4,000MW off the grid for the first time, as 40% of its generating capacity was unavailable with seven generating units tripping within five hours.
"The Eskom board and the minister agreed to bring in external power station engineers, and an independent audit done on what exactly is going on, so that we put Eskom back on track and give South Africans, sooner rather than later, the assurance that we have an entity that is able to give us the energy security that we require," said Gordhan.
The minister said one of the main elements in the current crisis was that Eskom’s new coal-fired power stations, Medupi and Kusile, were badly designed and were not operating at optimal levels.
Both power stations are years behind schedule and billions of rand over budget, contributing to Eskom’s debt load of more than R400bn.
The utility is seen as the biggest threat to SA’s finances. A new board and management team were appointed in January 2018, with former Land Bank boss Phakamani Hadebe taking over as CEO and Telkom chair Jabu Mabuza heading the board.
Despite the new team’s attempts to restore confidence in the utility, load shedding restarted briefly in June 2018
for the first time since 2015 following acts of sabotage during fraught wage negotiations.
Further power cuts followed in November due to a maintenance backlog.
In December, Ramaphosa appointed a high-level task team to make recommendations on the board’s turnaround strategy and advise on ways to ensure the utility’s sustainability. In his state of the nation address last week, Ramaphosa announced that the power utility would be unbundled into three separate entities: generation, transmission and distribution.
Trade unions oppose the proposal arguing that it will not solve Eskom’s governance and debt problems. Unions fear that implementing the proposal could lead to job losses.
Those backing the unbundling argue that it will create a more efficient system.
A separate Eskom entity focusing on transmission, for example, will give the company an incentive to procure electricity from the best-priced producers, including independent power producers (IPPs) in the renewable energy space. This reduction in costs can then be passed on to the consumer.
However, in the debate on Tuesday, EFF leader Julius Malema claimed that Ramaphosa’s diagnosis of Eskom was wrong.
"Your approach to Eskom will destroy the power utility," said Malema.
"We will not allow you to destroy Eskom for quick personal gains.
"As people who will be here and still active in the next 30 to 40 years, we are not going to allow you to destroy Eskom for quick gains," Malema said.
"If you proceed to privatise Eskom, be assured that we will look for the IPPs and physically shut them down, because they represent capitalist greed and obsession with money at the expense of our people."
DA leader Mmusi Maimane suggested that Ramaphosa was hamstrung by unions. "We all know any economy needs a dependable supply of electricity to grow. And so I’m sure you would love to unbundle Eskom, as you should have done 10 years ago, but your ANC-aligned unions won’t allow this," he said.
"We are a state of big promises. We are a state of commissions, task teams and road shows for every possible problem. But when it comes to actually doing things, we are a state of no action."
Ramaphosa will reply to the debate on Thursday.
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