Bloated Eskom falls deeper into financial crisis
23 July 2018
The DA notes with concern the R2.3 billion loss Eskom has posted for the 2017/18 financial year, from a profit of R0.9 billion in the last financial year. These losses are no doubt the result of the years of corruption, mismanagement and the bloated staff complement at the utility.
With 48 628 employees, Eskom’s staff complement has increased by 970 since the previous financial year. Remuneration for executives has also climbed to R66 million from R51 million in the previous year, this is a 29% increase.
Other worrying trends include the increase in irregular expenditure, which has climbed to a whopping R19 billion; municipal debt increasing by R4.2 billion to R13.6 billion, a 44% increase and finance costs climbing from R19.5 billion to R25.9 billion, a 32% increase from 2016/17 to 2017/18.
Eskom’s latest financials once again reiterates the need for a complete turnaround strategy for South Africa’s energy sector. The DA plans to introduce a Private Members Bill aimed at dismantling Eskom and creating a separate public entity which will govern and manage the country’s electricity grid and transmission lines. The remaining part of Eskom, responsible for generation, will be privatised and compete on an equal footing with other entities, including renewable companies, for generation capacity.
This will ensure a more efficient, reliable and competitive energy sector which will not only prioritise service delivery to South African citizens but will also lead to much-needed job creation and foreign investment.
Eskom’s financial numbers are not sustainable, especially at an entity which is grappling with a coal supply crunch, load shedding due to union strikes and wage negotiations still not having been settled.
The power utility is the most important entity in South Africa’s arsenal, however, it is inefficient and archaic. If Eskom were to collapse, it will have serious consequences for the economy and ordinary citizens.
The reality is that Eskom is facing collapse and it will continue to stumble from one crisis to the next until such reforms are implemented. It is clear that the new dawn has simply remained a slogan at the power utility as there has been very little change.
The DA will continue to fight for an efficient and transparent Eskom. South Africans deserve a power utility that delivers reliable energy to the economy to empower it to grow and create jobs for the 9.5 million unemployed South Africans.
Issued by Natasha Mazzone, DA Shadow Minister of Public Enterprises, 23 July 2018