ANC briefed on plan to turn Eskom around

Tman*

Expert Member
Joined
Jul 18, 2012
Messages
2,129
#23
am I the only one thinking the split into 3 is a VERY bad idea?

Instead of 1 payroll manager, now you have 3. Instead of 1 tender that can go haywire now you have 3.
 

Johnatan56

Honorary Master
Joined
Aug 23, 2013
Messages
22,364
#24
am I the only one thinking the split into 3 is a VERY bad idea?

Instead of 1 payroll manager, now you have 3. Instead of 1 tender that can go haywire now you have 3.
No because you can have competition for e.g. power production rather than one giant tender like Kusile or Medupi. In private those two power stations would have been cut and we wouldn't have to pay bailout.

Also, there would be investment the moment a new technology comes out that can undercut, so all producers need to keep everything up to scratch.
 

LazyLion

King of de Jungle
Joined
Mar 17, 2005
Messages
100,872
#25
am I the only one thinking the split into 3 is a VERY bad idea?

Instead of 1 payroll manager, now you have 3. Instead of 1 tender that can go haywire now you have 3.
It's completely pointless without addressing the reasons for the rot.
If you don't strip out the corrupt people, they're just going to continue doing what they have been doing.
Instead of one big trough, we now have 3 smaller piggie troughs.
 

yebocan

Executive Member
Joined
Sep 22, 2005
Messages
8,608
#26
It's completely pointless without addressing the reasons for the rot.
If you don't strip out the corrupt people, they're just going to continue doing what they have been doing.
Instead of one big trough, we now have 3 smaller piggie troughs.
agreed....however, starts taking the notion of TOO BIG TO FAIL off of the table.
 

Join

Well-Known Member
Joined
Jan 13, 2018
Messages
149
#28
Storage + Solar is already cheaper than CoCT current rates. +- 5-10% cheaper depending.
Solar is far cheaper than Eskom.

If next year increase happens, Eskom or CoCT (i.e. Muni) electricity sales economics are looking less and less viable.
There are two foreign investors trying to build africa's biggest windfarm in the nothern cape, but efkom and goverment wont allow them as they cannot loot more than what they need to pay these businesses for pure electricity to the grid.
 

Peon

Expert Member
Joined
Sep 28, 2006
Messages
2,544
#30
CR alluded to some debt relief to efkom. The question I ask, is that going to be enough?

I understand the debt to be too big to fill/fix. Split the utility into 3, ok i get that. Unless im missing something im sure efkoms creditors wont go, "Ok thats fine, dont worry about the billions you owe, thats ok now" The debt has to be paid, one way or another.
 

McT

The Humble Scot!
Joined
May 19, 2009
Messages
34,944
#33
am I the only one thinking the split into 3 is a VERY bad idea?

Instead of 1 payroll manager, now you have 3. Instead of 1 tender that can go haywire now you have 3.
This is like kicking the tin can down the road. It does not address the cause of the rot. Instead, we are going to incur senseless expenditure breaking it up? Doff! Really doff!!!

Privatisation or part thereof is the only logical solution. But who would want anything to do with an organisation which has this much trouble.
 

Gordon_R

Executive Member
Joined
Jul 5, 2009
Messages
5,223
#34
An opinion article, with a lot of details, and several contrarian viewpoints: https://www.businesslive.co.za/bd/o...restructuring-is-just-the-illusion-of-action/

Renewables replacing coal; managing supply (not demand); and understanding the risky business of Eskom all need to be addressed
Eskom has a debt problem, so split the company into three. Three? What has that got to do with debt?

Eskom also has operational problems, but restructuring will not fix coal purchasing (its major expense) or plant maintenance. It will certainly disrupt central services.
New technologies, some may be beyond a foreseeable five-year technology horizon, threaten the 30-year intended life of electricity assets. The old assets may be capable but are no longer competitive. Their asset values are threatened by new technologies.
Fixed pricing must match fixed cost structures. Appropriate fixed charges to all consumers will enable lower kWh tariffs and incentivise high levels of consumption in price sensitive industries. A typical electricity bill is 60% to 80% variable in (consumption) charges, yet most of a utilities’ costs are “fixed” in the short-term. This mismatch can be addressed by redesigning the tariff structure.
Compared to the latest wind selling price (69c), we must eliminate 36c of cost from the capital recovery to make Medupi competitive with wind. This requires a 68% write-off of the asset value making a R131bn deficit in the Eskom balance sheet.
Can the assets be sold? Only at a loss, as shown above, and someone must pay for that the loss.
Unbundling Eskom and concurrently restructuring the country’s electricity industry structure is mega-project. There’s one iron-clad rule of mega-projects: it will take far longer than planned, it will cost far more than budgeted, and it will deliver far less benefits than promised.
 
Top