Eskom faces challenges

15 May 2018

Whilst Eskom’s operational performance remained strong for the six months ending on 30 September 2017, the company reports, it is facing significant challenges.

The company achieved generation plant availability of 83.2% which is in line with its “80% energy availability, 10% planned maintenance, and 10% unplanned maintenance by 2020” target under its Generation Sustainability Strategy.

And the new build programme is on track, with Medupi 4 having achieved commercial operation on 28 November 2017 and Kusile 1 on 30 August 2017, adding a total of 1594 MW of new capacity. In addition, 350 km of transmission and distribution lines were constructed, 1000 MVA of transformer capacity was commissioned and some 100 380 new households were connected to the grid.

However, the company is facing severe financial challenges and liquidity issues.

One problem has been flat revenues attributable to the 2.2% price increase for 2017/18 coupled with sales volumes declining by 1.9%, “exacerbated by escalating municipal arrear debt.”

Eskom Chairperson Jabu Mabuza said that the new board “has to take decisive action and find credible solutions to the complex challenges that impede Eskom’s sustainability...We need to root out financial mismanagement, malfeasance and maladministration as a critical foundation to restoring transparent and effective governance.”

Eskom says its efforts to improve trust and restore investor confidence has received a boost with the recent departure of a number of senior managers who were implicated in “corporate governance lapses and impropriety”, with investigations ongoing into other senior management and executives facing various allegations of impropriety. 

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