eskom municipal debt

Eskom electricity pylons. (Brent Meersman)

Eskom ‘running on fumes’ as liquidity reserves begin to run dry

By the end of November, their reserves will stand at a mere R1.2bn

eskom municipal debt

Eskom electricity pylons. (Brent Meersman)

Eskom’s battered and bruised reputation seems to have hit the energy giant where it hurts. The company now only have R1.2 billion left in liquidity reserves for the end of this month.

Confirmed in their report to shareholder representative Lynne Brown, Eskom blame ‘poor governance’ for having a negative impact on their financial status, calling their future existence into question. The findings were uncovered by Fin24 and EE.

By the month’s end, Eskom are usually projected to have R20 billion in the kitty. But their funds for November are almost 5% of the target.

Eskom in the dock for state capture

A Parliamentary portfolio committee are currently hearing testimony from ex-employees, over the company’s role in state capture. Former chiefs Anoj Singh, Brian Molefe and Matshela Koko have come under fire for their rogue dealings with Gupta-owned companies, giving expensive tenders to the corrupt family.

It is now being estimated that Eskom will slide into a negative liquidity fund position by January 2018. They are forecast to be R5 billion down. People’s jobs are hanging by a thread, as well as the companies ability to continue trading

Energy giant is a ‘going concern’

Khulu Phasiwe is an Eskom spokesperson. He has been given the task of putting a positive spin on things. In an unenviable position, Phasiwe welcomed the parliamentary inquiry as a useful tool for getting these issues ‘out in the open’, so they can stop the rot sooner.

He believed an increase in tariffs over time, additional funding initiatives and the cost-cutting exercise under the current strategy will in fact ensure that Eskom maintains its going concern status.

Too big to fail?

Perhaps now is too soon to write the obituaries of Eskom, however. They are a state-owned entity. Malusi Gigaba has previously claimed government “won’t allow” the energy firm to fail. Which means our tax money will be ploughed into the SEO time and time again, however,  in a desperate bid to produce positive arrears.

Just another day in the life of a South African worker.