(From L) Eskom’s Group Chief Executive Phakamani Hadebe, South African Minister of Enterprise Pravin Gordhan, and Eskom board chairman Jabu Mabuza give a joint press conference to update on the current status of electricity supply during a visit at the Lethabo Power Station on April 3, 2019 in Sasolburg, South Africa. (Photo by Phill Magakoe / AFP)
Eskom announces loss of R20.7 billion for financial year
Another massive blow for South Africa’s most vital State Owned Enterprise.
(From L) Eskom’s Group Chief Executive Phakamani Hadebe, South African Minister of Enterprise Pravin Gordhan, and Eskom board chairman Jabu Mabuza give a joint press conference to update on the current status of electricity supply during a visit at the Lethabo Power Station on April 3, 2019 in Sasolburg, South Africa. (Photo by Phill Magakoe / AFP)
Eskom, South Africa’s embattled national power utility, has recorded one of its largest-ever financial losses in the 2018/2019 financial year.
This dismal declaration was issued on Tuesday afternoon when the power utility’s fractured board addressed reporters at Megawatt Park in Johannesburg.
Eskom loses a further R20.7 billion in 2018/19
CEO in waiting, Jabu Mabuza, announced that he had accepted a “burden” from minister Pravin Gordhan, saying:
“Today Eskom releases results that, while expected, are unfavourable. The organisation disappointingly incurred a net loss after tax of R20,7 billion for the year.”
Despite fierce revitalisation efforts, sanctioned by President Cyril Ramaphosa himself, Eskom’s crippling financial and operational instability still remains one of the biggest single threats to South Africa’s economic prospects.
The struggling State Owned Enterprise (SOE) – arguably the most vital of them all – has been beleaguered by corruption, mismanagement and malfeasance, which climaxed during the tenure of former president Jacob Zuma and the infamous State Capture project.
As a result of grievous financial losses and unsustainable power plant maintenance programs, South Africa, in 2018, was plunged into darkness by protracted load shedding schedules.
Eskom’s monumental failings, which cost the South African economy hundreds of billions of rands, were targeted by Ramaphosa as part of his ‘New Dawn’ philosophy. The deployment of inter-ministerial task teams, sanctioned by Public Enterprises Minister, Pravin Gordhan, towards the end of last year, was intended to heal the deeply plagued parastatal.
Load shedding likely to return, warn experts
In addition to load shedding – which was understandably unpopular with citizens – Eskom recently raised the price of electricity, by upwards of 14%, further distressing consumers.
Government, in an attempt to stave off complete collapse of the State Owned Enterprise, recently awarded Eskom a highly-contentious R59-billion bailout – which is due to keep the utility afloat over the next two years.
This forms part of a much larger bailout programme, which has promised Eskom in excess of R200-billion within the next decade.
Worryingly, energy experts have warned of the return of load shedding in August, citing serious operational misgivings within Eskom.
Earlier in the day, African National Congress (ANC) General Secretary, Ace Magashule, reaffirmed that restructuring procedures – splitting Eskom into three separate entities – would take place as planned. Magashule, on the back of a rising unemployment rate, assured against further job losses as a result of the process.
The Eskom board, meanwhile, has been subject to numerous structural changes. In the wake of Phakamani Hadebe’s resignation, it’s been confirmed that Mabuza will take over the reins as CEO of Eskom.
Earlier in the year, Eskom spokesperson, Khulu Phasiwe, also announced his resignation, citing strenuous operational pressures.
