Public enterprises minister Pravin Gordhan has lamented the fact that there are not enough criminals donning orange overalls in prison for acts of corruption at Eskom.
Gordhan updated the standing committee on public accounts (Scopa) on Tuesday on plans to fix Eskom, saying corruption at Eskom and among companies doing business with it “is still a challenge [as] there seems to be no limit to greed that permeates that whole ecosystem”.
“Corruption is going to carry on unless law enforcement and the prosecuting authority put the real ringleaders behind bars. Whether one likes it or not, there are not enough people in orange uniforms at this particular point in time,” Gordhan said.
Eskom is among state-owned enterprises that have been hollowed out by years of malfeasance and corruption linked to state capture. Business Day reported previously that coal-smuggling syndicates whose modus operandi includes hijacking deliveries of high-grade coal to Eskom and swapping them with lower-grade product, are being targeted by the SA Revenue Service (Sars) for alleged tax crimes amounting to R500m.
Eskom, which was allocated R254bn in February to service its debt to global finance institutions, relies on government bailouts to keep the lights on, amid persistent power cuts that have resulted in low economic growth and huge job losses. The power utility's debt tops R425bn, making it the single largest threat to the economy.
Electricity minister Kgosientsho Ramokgopa has said debt owed by municipalities to Eskom has escalated by about R4bn in the current financial year and now stands at about R64bn, while Eskom has previously said debt owed by municipalities could increase to R68bn by end-March 2024 unless there is an intervention by the state.
The entity has made provision to spend about R30bn on diesel to power open-cycle gas turbines (OCGT) this financial year. In the financial year to end-March 2023, Eskom exceeded its diesel budget of R6.1bn, spending R21bn to run the OCGTs. During the first four months of the financial year from April 1 Eskom spent about R2.3bn on diesel per month on average.
“The bottom line is Eskom requires more megawatts to come into system [and] some of that happened in 2022 … We will work out how to finance new transmission lines that need to be installed,” Gordhan said on Tuesday.
The minister pointed out there were a number of global factors South Africans had no control over, which affected Eskom’s performance. “The geopolitics and geoeconomics that impact on emerging markets is quite a devastating one. Interest rates have gone up in terms of borrowing, bonds fluctuate strongly; exchange rates; there are a number of factors over which South Africans have no control,” he said.
Gordhan said the key was to combat the culture of corruption within Eskom’s ecosystem: “It seems that greed is a powerful motive force in terms of undermining institutions such as Eskom….”
He said the debt formula for municipalities owing Eskom was a “breakthrough”, and described it as a “stick and carrot approach”. “It’s a great formula to break through some of the barriers experienced over the past few years. It needs to be given time to prove itself,” said Gordhan.
Eskom chair Mteto Nyati said: “What has changed operationally [is that a] new board was appointed in October 2022. There is a committee of the board that was set up — the business operations performance committee — where a significant number of engineers on the board sit.”
Nyati said the committee's first responsibility was to pick up where the operational challenges are. “Then together with management, (it will) come up with a plan that is going to help us come out of this problem that we are facing,” he said.
He said the generation recovery plan was approved by both Gordhan’s ministry and the Eskom board. “It’s a 24-month plan ... We said there are power stations doing well, let’s protect them.
Then [there are] six others contributing the most to problems we are facing at Eskom, we said let’s focus on those. [They include] Thuthuka, Matla, [and] Kusile.
Progress made was that in October, the energy availability factor touched 60%, he said, and the plan was to increase it to 65% by March. “We can see us getting there. The key is to do what we said we are going to do … in a disciplined way,” the Eskom chair said.
With Denene Erasmus
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