Eskom’s problems far worse than expected

Eskom has been dogged by allegations of corruption and mismanagement, and this is showing in its expected financial results over the short and medium term.

The Rapport reported that Eskom expects a loss of R8.1 billion in the short term, which is set to balloon to R26.5 billion in the medium term.

These projected losses are the highest a state-owned enterprise has ever experienced in South Africa.

The National Treasury described Eskom’s financial problems as the single biggest risk to the South African economy and public finances.

This echoed the views of finance minister Malusi Gigaba, who said in January that Eskom’s financial woes could collapse the economy.

“There would be no currency, and no economy for the country if Eskom went belly-up,” said Gigaba.

To address the mismanagement at Eskom, Gigaba said in his recent budget speech that the government has strengthened Eskom’s board and management with “highly-capable, ethical, and credible leadership”.

Further allegations of mismanagement

In related news, the Sunday Times reported that former Eskom executive Matshela Koko’s wife has received millions of rand from the power utility.

“Documents in the possession of state capture investigators suggest the money flowed to companies where Koko’s wife, Mosima, is a director,” said the Sunday Times.

The report stated that the money was “channelled through Eskom service provider Impulse International, where Mosima’s 27-year-old daughter, Koketso Choma, was a non-executive director”.

In March last year, the Sunday Times reported that Koko’s stepdaughter received contracts for her company worth R1 billion from Eskom.

The report stated that Choma was appointed as a director at Impulse International in April 2016, after which it received eight contracts from the division of Eskom which Koko headed up.

Now read: Eskom puts R1.7 billion in its pocket, instead of fixing power station

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Eskom’s problems far worse than expected