Every role player in South Africa needs to buy into the fixing of Eskom, Public Enterprises Minister Pravin Gordhan told the City Press.
Gordhan said that his team will be engaging with a variety of important stakeholders following the recent release of Eskom’s roadmap.
“What we require is a recognition by various businesses, communities, unions and ourselves as government, and any other suppliers who are part of this industry, that this is a national project,” said Gordhan.
Gordhan highlighted that Eskom is “too big to fail,” but noted that the national electricity provider cannot continue operating as it is currently.
“Eskom is unable to trade its way out of this. So you’ve got to manage its debt on the one hand and return it to operational efficiency at the same time, and restructure it in terms of the future vision for it.”
“The quicker we move and get some certainty of these things bedded down, the better for creating certainty and confidence in the system.”
Gordhan recently released the plan to save Eskom to the public, which involves the unpackaging of Eskom’s current portfolio.
The transmission unit of Eskom will become its own entity by March 2020, and will be under the control of a separate, state-run company.
Eskom is also looking to renegotiate various contracts it has with independent suppliers of renewable energy, as well as repurposing coal plants that are set to be decommissioned.
French ambassador to South Africa Aurelien Lechevallier recently told the Sunday Times that France is orchestrating plans to help Eskom.
“With our French development agency, we are ready to provide some kind of financial support to assist with the restructuring of Eskom,” said Lechevallier.
“It will not be France alone; it could be France with maybe Germany, maybe with South African development banks, maybe the Brics bank.”
How to fix Eskom
Energy expert Ted Blom recently said that Eskom is paying much more than it should be for lower-quality coal and that maintenance is costing the company more than ever before.
He also said that Eskom’s payroll is R26 billion more than it can afford.
“They are sitting with 35,000 too many employees,” Blom said.
According to Blom, tough decisions need to be made to turn the situation at Eskom around, including the following suggestions made by stakeholders:
- Significantly reduce Eskom’s workforce by retrenching thousands of staff members.
- Aggressively address mismanagement and corruption at Eskom, which includes firing and prosecuting corrupt staff members.
- Ensure Eskom pays the lowest possible price for coal, equipment, and services. This may involve removing some of the BEE policies related to procurement.
- Remove all regulatory restraints which stop small scale power generation plants from feeding into the grid.
- Privatise parts of Eskom to improve productivity.
- Invest significantly in renewable energy projects as a matter of urgency.