Eskom's new acting chief executive Brian Molefe says he is not in favour of cutting electricity to municipalities as threatened, and the utility is not on the verge of bankruptcy.
Molefe said instead of cutting off defaulting municipalities, he would rather see prepaid meters installed.
He also announced that the completion of two new vital power stations would be delayed by up to two years.
He was addressing a heated meeting of parliament’s portfolio committee on public enterprises yesterday.
Eskom had earlier threatened to pull the plug on 20 defaulting municipalities, including Grahamstown-based Makana, if they didn’t pay up their outstanding debts.
Yesterday Molefe revealed that the total amount owed by the 20 – R4.5-billion – was in fact just over half of the R8-billion owed by Soweto alone, which was not threatened by blackout.
There had been persistent rumours that powerful ANC leaders were strongly opposed to cutting power to the 20 municipalities, and yesterday Molefe revealed that he, too, was opposed to the plan.
He said he preferred the installation of prepaid meters to ensure costs were paid by end-users.
Molefe, the Eskom board and Eskom executives faced hostile parliamentarians yesterday over loadshedding and its disastrous consequences for economic growth.
After DA MP Gordon Mackay and UDM MP Nqabayomzi Kwankwa asked what sense it made to connect people to the electricity grid while pricing them out of the market through enormous tariff increases, Molefe initially became irritated.
Calling Mackay “emotional” for saying that a developmental state had to provide access to electricity regardless, he later conceded the poor had to be cushioned against steep price increases.
Mackay also pointed out that the rosy picture Eskom executives were painting of the country’s electricity situation was unfounded, because although the power utility claimed the country had access to electricity 96% of the time even with loadshedding, the power crisis had shaved up to 2% off economic growth, killing job prospects.
Molefe had to face flak from all political parties about the effect of strikes on construction sites for the two major coal-fired power plants under construction, Medupi and Khusile.
He blamed “private sector companies and their labour practices” for the ongoing and costly construction delays.
MPs said Eskom should do more to see construction expedited, because the country needed the electricity.
That was when Molefe revealed that the completion of Medupi and Kusile would be delayed further by two years and one year respectively.
The utility, which has an installed generating capacity of 42000MW, said it needed to switch off up to 5000MW to carry out maintenance in order to avoid further power outages.
Eskom suffered its worst power shortage in years last week when it lost a quarter of its supply.
Referring to the utility’s financial position, Molefe said Eskom was nowhere near bankruptcy and would cooperate with ratings agencies to avoid downgrades.
Eskom had an estimated funding gap to 2018 of R200-billion, and expects to receive R23-billion from the government this year.
“From a cash position, Eskom has a substantial number of facilities that have been negotiated but not drawn down,” he said.
“In addition, the Treasury has made a commitment to give Eskom about R23-billion, which I believe will be given in two tranches during this financial year.
“We do not think that Eskom is about to be declared bankrupt or insolvent.”
Standard & Poor’s in March cut its credit ratings for the utility to junk following the suspension of the utility’s CEO and three other senior executives while an investigation into the parastatal was being conducted.
“We will be engaging with rating agencies to find out what it is they would like to see for Eskom to be rerated investment grade, and we will do everything that they say we should do to bring it back,” Molefe said. — With additional reporting by Reuters
Eskom backs off on threat to defaulters
Molefe said instead of cutting off defaulting municipalities, he would rather see prepaid meters installed.
He also announced that the completion of two new vital power stations would be delayed by up to two years.
He was addressing a heated meeting of parliament’s portfolio committee on public enterprises yesterday.
Eskom had earlier threatened to pull the plug on 20 defaulting municipalities, including Grahamstown-based Makana, if they didn’t pay up their outstanding debts.
Yesterday Molefe revealed that the total amount owed by the 20 – R4.5-billion – was in fact just over half of the R8-billion owed by Soweto alone, which was not threatened by blackout.
There had been persistent rumours that powerful ANC leaders were strongly opposed to cutting power to the 20 municipalities, and yesterday Molefe revealed that he, too, was opposed to the plan.
He said he preferred the installation of prepaid meters to ensure costs were paid by end-users.
Molefe, the Eskom board and Eskom executives faced hostile parliamentarians yesterday over loadshedding and its disastrous consequences for economic growth.
After DA MP Gordon Mackay and UDM MP Nqabayomzi Kwankwa asked what sense it made to connect people to the electricity grid while pricing them out of the market through enormous tariff increases, Molefe initially became irritated.
Calling Mackay “emotional” for saying that a developmental state had to provide access to electricity regardless, he later conceded the poor had to be cushioned against steep price increases.
Mackay also pointed out that the rosy picture Eskom executives were painting of the country’s electricity situation was unfounded, because although the power utility claimed the country had access to electricity 96% of the time even with loadshedding, the power crisis had shaved up to 2% off economic growth, killing job prospects.
Molefe had to face flak from all political parties about the effect of strikes on construction sites for the two major coal-fired power plants under construction, Medupi and Khusile.
He blamed “private sector companies and their labour practices” for the ongoing and costly construction delays.
MPs said Eskom should do more to see construction expedited, because the country needed the electricity.
That was when Molefe revealed that the completion of Medupi and Kusile would be delayed further by two years and one year respectively.
The utility, which has an installed generating capacity of 42000MW, said it needed to switch off up to 5000MW to carry out maintenance in order to avoid further power outages.
Eskom suffered its worst power shortage in years last week when it lost a quarter of its supply.
Referring to the utility’s financial position, Molefe said Eskom was nowhere near bankruptcy and would cooperate with ratings agencies to avoid downgrades.
Eskom had an estimated funding gap to 2018 of R200-billion, and expects to receive R23-billion from the government this year.
“From a cash position, Eskom has a substantial number of facilities that have been negotiated but not drawn down,” he said.
“In addition, the Treasury has made a commitment to give Eskom about R23-billion, which I believe will be given in two tranches during this financial year.
“We do not think that Eskom is about to be declared bankrupt or insolvent.”
Standard & Poor’s in March cut its credit ratings for the utility to junk following the suspension of the utility’s CEO and three other senior executives while an investigation into the parastatal was being conducted.
“We will be engaging with rating agencies to find out what it is they would like to see for Eskom to be rerated investment grade, and we will do everything that they say we should do to bring it back,” Molefe said. — With additional reporting by Reuters
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