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Eskom fails to meet all conditions for R59 billion bailout

 

Parliament – Eskom has failed to timeously meet the conditions imposed by National Treasury for the release of a R59 million bailout to help it cover its debt payments, Parliament's standing committee on appropriations heard on Wednesday.

National Treasury's director for oversight of state-owned enterprises, Ravesh Rajlal, said the utility had not complied with two conditions, the first being the disposal of the Eskom Finance Company.

 "There were two conditions that were not complied with, which is the condition number six which is the disposal the target date of the end of March, but they are now in a new bidding process and the target date is now end of March [2021]," Rajlal said.

Eskom has struggled to find a suitable buyer for the entity, which provides financial services to its employees, and was deemed non-essential by Finance Minister Tito Mboweni when he negotiated financial support for the company.

The utility also failed to meet condition 16, which relates to remuneration standards it must implement, Rajlal added.

Some of the pre-conditions attached to the state funding were partially met. These included the required assurances in "terms of the cost and timing of completion of Kusile and Medupi", the two mega power plants that doubled in cost as delays and design faults accumulated.

"That information now has been provided in the June report," he said.

Eskom revealed on Wednesday its debt has now reached R488 billion.

Chief executive Andre de Ruyter confirmed the cost of Medupi went from an initial R68 billion to R145 billion, while Kusile ballooned to R161 billion.

The quality of work provided by contractors fell short of standard, with the specialised welding on boilers proving of "poor quality" and requiring costly corrections.

He also conceded it was far from ideal to kickstart the two projects before the final design was complete.

Medupi and Kusile contributed considerably to Eskom's growing debt burden while delays, including work stoppages totalling some 24 months, left the country with a generation capacity shortfall that on Wednesday forced a return to stage 4 load shedding.

 

African News Agency (ANA)

 

 

 By ANA Reporter

 
 

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