MPs To Discuss Debt-ridden Eskom’s Cash Crisis

The Eskom crisis faces attention from members of Parliament with the public representatives set to grill the bosses of the power utility.

The programming committee heard that Eskom’s senior officials will appear before the public enterprises committee on Tuesday.

Eskom has recently received an injection of R59 billion as it faces a cash crunch.

This was an emergency provided by government after it realised the power utility would not be able to operate if there was no money from the fiscus.

Finance Minister Tito Mboweni has said part of the conditions for Eskom’s bailout was that it would sell some of its non-core assets. He said the power utility would have to sell its loan book and get R10bn.

The sale of non-core assets has been a subject of discussion for some time.

But now the government has also sent in a chief restructuring officer to monitor the funds of Eskom.

Several state-owned entities are in serious financial trouble.

They have received a bailout of more than R570bn in the last few years and Eskom was sitting with the largest debt, of R440bn.

State arms manufacturer Denel two weeks ago announced that it received a bailout of R2.8bn from government.

The first tranche of R1.8bn has been released with another tranche of R1bn to be released in the next financial year.

But SAA and the SABC still need funding with the airline requiring billions of rands.

The government had warned that Eskom was the single biggest risk to the economy and that if it defaulted on its loan it could trigger a cross-default in all entities.

Subsequently, the county would not have the money to settle the billions of rands owed to creditors by the entities.

But Mboweni has drawn a line in the sand that no entity would get a bailout without conditions.

Eskom is also facing the unbundling with the company set to split into three entities.

This has been opposed by the unions saying they feared that workers would lose their jobs.

Eskom’s built programme has been delayed by several years after numerous problems at Medupi and Kusile. The costs have ballooned from less then R79bn each to more than R165bn.

The coal-fired power stations were built in 2008 but they have not come on stream with only a few units online.

The power utility announced huge losses in the past two years. The irregular expenditure has also impacted on the funding operations of Eskom.