Eskom heads deeper into financial crisis with record loss

supersunbird

Honorary Master
Joined
Oct 1, 2005
Messages
46,929
#22
If Eskom's total debt is R419 billion, how can R15 billion loss be a record? That would take in excess of 20+ years to achieve assuming they had near R15 billion losses every single year.
Always so outspoken on things, yet you know nothing John Snow. Debt is not losses. Eskom aim is to break even or make a profit. They fell short of that aim for the year, and made a loss compared to what they had planned for.
 

supersunbird

Honorary Master
Joined
Oct 1, 2005
Messages
46,929
#23
This is false. Getting rid of 20000 employees will not fix ESKOM. Not even slightly.
So they will not have a billion or whatever saving per month for the reduced CTC of the 20 000 less employees? All those employees are totally necessary for Eskom to function?
 

Gordon_R

Executive Member
Joined
Jul 5, 2009
Messages
6,397
#24
If Eskom's total debt is R419 billion, how can R15 billion loss be a record? That would take in excess of 20+ years to achieve assuming they had near R15 billion losses every single year.
Your comment indicates a complete misunderstanding of accounting rules, though it does hint at the scale of the problem. Profit/loss is the difference between income/expenditure, minus depreciation on assets. Eskom does have assets that it has borrowed against, though what their actual value is, requires some hard guessing...
 

R13...

Honorary Master
Joined
Aug 4, 2008
Messages
28,826
#26
Tariffs are no the answer and Eskom know but it is the easiest crutch to tide them over and they're leaning hard on it. All that's going to happen is that more and more people paying customers will go off grid or at least reduce reliance on it which will just dig the hole deeper. Government will have to take over the debt and make the hard political calls needed to fix the utility, but it ain't happening.
 

SilverCode

Well-Known Member
Joined
Feb 26, 2004
Messages
470
#27
I can’t think of a technology that existed in the late 1990s that would be worth investing in for private energy generation, but those technologies certainly exist today. 1990s technology means big upfront costs and long waiting periods to realise profit. Not the case with the way IPPs are implementing renewable energy production.
IPP's don't even have to be large scale generation companies. You could feed into the grid using your solar panels for credit, or a farmer could put up a couple smaller wind turbines on fallow pieces of land. Larger companies can build coal power plants or other 24/7 plants to produce the base load.
 

ambroseg1

Executive Member
Joined
Jul 15, 2008
Messages
9,297
#28
Your comment indicates a complete misunderstanding of accounting rules, though it does hint at the scale of the problem. Profit/loss is the difference between income/expenditure, minus depreciation on assets. Eskom does have assets that it has borrowed against, though what their actual value is, requires some hard guessing...
Correct. I confused yearly losses with debt.
 

Quicks

Well-Known Member
Joined
May 29, 2017
Messages
411
#29
Guptas had a plan to steal even more. They really need to imprison people doing dodgy business with SOE's. Then again maybe it to late for that as well just a matter of time before SA implode.
 

3WA

Executive Member
Joined
Sep 25, 2012
Messages
5,068
#31
IPP's don't even have to be large scale generation companies. You could feed into the grid using your solar panels for credit, or a farmer could put up a couple smaller wind turbines on fallow pieces of land. Larger companies can build coal power plants or other 24/7 plants to produce the base load.
Yeah, and personally I would be happy to pay double or triple for electricity if I was buying directly from a small carbon neutral or carbon sink company. And they can easily meet the needs of residential users such as me.
 

Gordon_R

Executive Member
Joined
Jul 5, 2009
Messages
6,397
#32
Yeah, and personally I would be happy to pay double or triple for electricity if I was buying directly from a small carbon neutral or carbon sink company. And they can easily meet the needs of residential users such as me.
Deregulation of the transmission (Eskom) and distribution (municipal) parts of the electricity network is unfortunately very complex, and unlikely to happen anytime soon.

Even home solar panel installations are contentious...
 

Cube3

Expert Member
Joined
Jun 3, 2008
Messages
1,192
#33
The Government will never slice up Eskom, this is just another mechanism they use to loot the country.
They should reduce the headcount, cut excessive salaries and sell off assets, even the unfinished power stations.
 

Gordon_R

Executive Member
Joined
Jul 5, 2009
Messages
6,397
#34
The Government will never slice up Eskom, this is just another mechanism they use to loot the country.
They should reduce the headcount, cut excessive salaries and sell off assets, even the unfinished power stations.
I'm confused by your statement: Who is going to buy the unfinished power stations, if they cannot sell electricity back to the grid? Their scrap value is close to zero...
 

ToxicBunny

Honorary Master
Joined
Apr 8, 2006
Messages
79,071
#35
I'm confused by your statement: Who is going to buy the unfinished power stations, if they cannot sell electricity back to the grid? Their scrap value is close to zero...
I would actually assume their scrap value to be significantly in the negative if they can't be used to generate electricity for the grid.
 

Swa

Honorary Master
Joined
May 4, 2012
Messages
19,232
#36
The heavy industry closed up shop because of the issues with power generation capacity, and it has stopped new industry - Coega Aluminium Smelter as a case in point - "Although some progress was made in discussions regarding the supply of electricity to the Coega aluminium smelter project, it was insufficient . "

(Although I'm not sorry it didn't happen for environmental reasons, aluminium smelting is horrible for the environment).

That is to say, while we may not have an immediate problem, there was a problem, which lead to less consumption, which in itself is a problem because less consumption => less income => higher fees to make up the difference.

We need more capacity, we need heavy industry to have the capacity it needs to expand, we need to use more electricity to make it cheaper for everyone.
Even if they have this extra capacity nobody is going to use it at current prices. They also won't reduce prices now because it would mean an immediate loss until more income is realised.
 

Zoomzoom

Expert Member
Joined
Aug 15, 2014
Messages
3,749
#38
Even if they have this extra capacity nobody is going to use it at current prices. They also won't reduce prices now because it would mean an immediate loss until more income is realised.
sounds like a classic catch 22 situation. however they need to do something. it's a vicious circle - people can't afford the new rates, so they cut back on consumption, municipalities and Eskom suffer from loss of income as a result so they increase tariffs or introduce more base charges before you use a single unit of anything, which makes people tighten their belts more. Add to that the effect of rolling blackouts as people source alternatives to keeping their lights on when there is no electricity and bip bop you have millions less units being sold which leads to ... and around we go.
 

krycor

Honorary Master
Joined
Aug 4, 2005
Messages
14,127
#39
sounds like a classic catch 22 situation. however they need to do something. it's a vicious circle - people can't afford the new rates, so they cut back on consumption, municipalities and Eskom suffer from loss of income as a result so they increase tariffs or introduce more base charges before you use a single unit of anything, which makes people tighten their belts more. Add to that the effect of rolling blackouts as people source alternatives to keeping their lights on when there is no electricity and bip bop you have millions less units being sold which leads to ... and around we go.
Was about to say.. we at that point where people will get off or steal with further increases.. kinda like taxes and before we know it no-one is paying enough with/out usage.

Same thing happening with tax in SA.. the October mini budget and budget speech in 2020 will be fun to watch as the stats of number of tax payers will be very telling. I’ll be watching remotely of cause
 

Gordon_R

Executive Member
Joined
Jul 5, 2009
Messages
6,397
#40
https://www.fin24.com/Economy/Eskom...oblems-on-consumers-energy-regulator-20190116

Eskom cannot transfer the costs of having to improve the capacity of power stations, onto consumers, the national energy regulator has said.

The National Energy Regulator of South Africa (Nersa) held its third day of nationwide public hearings on Eskom's tariff applications.
During the day's hearings in Port Elizabeth, the panel of regulator members, led by chairperson Nomfundo Maseti, heard how Eskom's performance problems were linked to capacity issues due to limited funds to implement maintenance on units.

But Maseti took Eskom to task over this, asking how the power utility intended to take responsibility for its failings.
 
Top