Eskom unbundling will be completed in June: Pravin Gordhan
Public enterprises minister Pravin Gordhan has announced that the unbundling of Eskom will be completed in June.
During his budget speech on Tuesday, Gordhan said while this process would be finished in June, the complete legal separation of the three units — distribution, transmission and generation — from Eskom Holdings would be done by December 2022.
“The legal separation of the transmission company will be completed by December 31 2021 while also working towards legal separation of the distribution and generation companies with Eskom Holdings by December 31 2022,” said Gordhan.
He said each of the divisions will have its own profits and losses account.
“A total of 6,773 employees have been moved from corporate functions to divisions in readiness for legal separation.”
The unbundling of the power utility was announced by President Cyril Ramaphosa during his state of the nation address in February 2019.
Eskom is heavily indebted and has been mired in serious allegations of corruption while struggling to keep the lights on.
Gordhan said they have been making progress in recovering money stolen from the parastatal by companies with which it was doing business.
He said Eskom has been correcting latent defects at its Medupi and Kusile power stations.
“Money stolen from the projects is gradually being recovered from the people and companies involved,” said Gordhan.
He said the management of Eskom’s debt is one of the key priorities to return the entity to a sustainable path.
“The entity is continuing to implement its cost reduction initiative, with a saving of R13.5bn achieved in the 2021 financial year. Most notably was the R83bn reduction in debt in the 2021 financial year, from R484bn to R401bn due to the repayment of the maturing debt and changes in the exchange rate.”
However, Gordhan told parliament that Eskom’s consumer debt continued to escalate, standing at R45.1bn with 78% owed by municipalities.
Soweto alone owes 17% of the total debt.