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Covid impacts Eskom’s turnaround

DPE deputy minister says new Eskom transmission company will be operational by end 2021, and shares concerns over SAA business rescue delays and fees.
Photographer: Waldo Swiegers, Bloomberg

The Covid pandemic has negatively impacted Eskom’s turnaround plan, Deputy Minister of Public Enterprises Phumulo Masualle told the National Council of Provinces (NCOP) on Tuesday.

He was answering questions on behalf of Public Enterprises Minister Pravin Gordhan, who was absent for undisclosed reasons, at Parliament’s Standing Committee on Public Accounts (Scopa).

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While Gordhan will clearly be on the red carpet should he honour his Scopa appointment next week, it was Masualle who had to field the tough questions in his absence as the minister ducked question time in the NCOP on Tuesday.

The deputy minister confirmed that his department and National Treasury had agreed that Eskom be divided into three parts and that the soon-to-be-established transmission company be operational by the end of this calendar year, with the other two new companies operational by the end of 2022.

However, he confessed that Eskom’s turnaround plan had been very negatively impacted by the Covid pandemic and resultant partial shutdown of the economy.

Regarding continued loadshedding, he said on an average day 11 500 megawatt of Eskom capacity is unavailable due to unforeseen breakdowns and scheduled shutdowns for the type of routine maintenance which had not been undertaken for years.

Such maintenance will continue despite resulting in loadshedding, Masualle said.

Read: Eskom CEO: Power shortfall could increase as economy grows
Listen: Eskom’s Phillip Dukashe on the utility’s maintenance catch-up plans (or read the transcript here)

He also maintained that operational challenges at the new Kusile and Medupi power plants were being sorted out and that strict corporate governance rules were being implemented at the electricity supplier to prevent the abuses currently being exposed at the Zondo Commission into state capture from recurring, and to combat malfeasance.

Read: Medupi and Kusile design modifications: Progress and problems 

To EFF criticism that too many white males were being appointed to key positions, Masualle answered that both merit and transformational goals were to be realised when appointments were made.

According to the deputy minister, electricity payment levels in Soweto are improving, although he did not provide any specific details.

Aside from Eskom, he also shed some light on the country’s state-owned airline, SAA.

SAA concerns

He did express deep concern over the fact that SAA has been in business rescue for more than a year now. Voluntary severance packages have been paid to 3 094 employees, while 3 885 employees have received three-month salary packages.

Masualle expressed unhappiness about the plight of SAA employees, and said the government cares very much about what happened to them.

He, however, confirmed that three possible equity partners are in the running and that South African taxpayers are going to have to continue paying for bailouts for the airline.

SAA’s business rescue practitioners and management failed yet again to account to Scopa, when on Tuesday morning both Siviwe Dongwana and Les Matuson failed to pitch for a scheduled meeting due to Matuson suffering a family bereavement.

Read: MPs slam SAA BRPs for no-show

DA MP Alf Lees said that while it is absolutely understandable that Matuson was unable to attend due to the loss in his family, it is puzzling that Dongwana and the SAA executives also stayed away.

“There were two business rescue practitioners appointed for the SAA process which has now taken 16 months with absolutely no sign of a rescue, and there is no reason why the business rescue practitioner not affected by the bereavement could not have appeared before Scopa,” Lees said.

He pointed out that the business rescue practitioners and their associated businesses have raked in fees in the region of R300 million, but they stand ready to make even more money from the failing entity.

“Not only have they taken massive fees from the taxpayer without achieving the rescue of the SAA, they are now proposing that one of them, Dongwana, (once the director general of public works during the Zuma/Nkandla scandal) and his business associate, Bongani Nkasana, be appointed as the so-called receivers for SAA,” Lees said.

He reiterated that the business rescue practitioners are being paid handsomely even as the taxpayer is bailing out SAA at a rate of R32 billion over two years, while millions of South Africans remain jobless and starving.

Lees said critical answers would be demanded of Gordhan when he appears before Scopa next week. These include:

  • What further taxpayer bailouts are intended to attempt to get SAA operational?
  • When will the bailouts stop?
  • What are the identities and details of the purported potential SAA equity partners?
  • What are the exact fees payable to the business rescue practitioners and their business associates?
  • Which tender process was followed in the appointment of SAA receivers?
  • Who is conducting the regulatory required pilot training for SAA and Mango pilots given that the pilots qualified to do so have been locked out by the business rescue practitioners?
  • Under which circumstances will the lockout of SAA pilots be lifted?
  • Will full retrenchment packages be paid to SAA staff?

Read: SAA tries to replace locked-out pilots with outsiders

Luister na Ryk van Niekerk’s se onderhoud met Jan Oberholzer, oor Eskom se bedryfsvertoning:

COMMENTS   11

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Eskom is like a circus – over supply of clowns

When Pravin sends the deputy…. you know things are being brushed off….

Eskom should please don’t continue to annoy the people with the nonsense that implies that loadshedding is related to ongoig maintanance. Ongoing maintance for ten-twenty good years! Get the hell out of here. When the National Party, yes, the Nats were in power we did not have maintance go on into infiniti. You either had reliable electricity or you didn’t. Now we have the ANC coal-barrons actively sabbotaging the nations ability to deliver clean and reliable electricity just so that they can continue to have coal contracts and milk the State into perpetuity. Don’t take my word for it, ask Masele Koko how he was able to provide electricity without a day of loadshedding. Cut the ruse. How can an industrialized country work like this? With candles half the time?

SAA is far beyond rescue. The BRP is not supposed to rescue SAA. That’s a smokescreen, a front, and an excuse to prevent the bondholders from triggering cross-defaults at all the SOEs. SAA was the first card in the house of cards of bankrupt SOEs to collapse. Luthuli House is trying frantically to prevent cross-defaults that will bankrupt the state overnight and force the Reserve Bank to recapitalise the banking system and bail out the pension funds that hold the worthless bonds.

Luthuli House won’t be able to pay the monthly salaries of public sector employees if the SAA bankruptcy triggers the default. That will be the final nail in the coffin for the ANC zombie.

The business rescue process is not intended to save SAA, it is supposed to rescue Luthuli House. It is impossible to save Luthuli House, therefore, the process will be drawn out forever as they kick the can down the road and wait for the IMF to dig them out of the hole that the socialist losers have dug for themselves.

1. Lower energy sales would have hurt revenue but should also have created more headroom for planned maintenance.
2. The economic impact of lower energy sales would have been offset by not needing to run the at-loss peakers, as they would presumably hardly have been run at all.

I must say – it is simply marvellous to read an article from the pen of Jan-Jan Joubert on Moneyweb! He is a truly superb political analyst and a respected authority on the subject. He is an approachable person and we are honoured to have him address our Chamber of Commerce from time to time. I look forward to reading more articles from him on Moenyweb.

Self determination = anc = transformation = ESKOM/SAA = Gutter.

Self determination had a nice ring to it.

Hahahaaaa.

Mmmm – maybe you mean self extermination for the ANC

When will this government stop blaming Covid for its failures? First it was apartheid, now it’s Covid – no mention of racist BEE policies that have seen incompetent people running our SOE based on the colour of their skin and political relationships rather than experience and expertise.
No mention of the theft and fraud perpetrated by those in power – no arrests, no in R elations….just talk talk talk and backhanders all around.
I’m sick of it….and very disappointed in the disfunctional disunited ANC. If they can’t get their act together in the party, how in hell are they able to run a Municipality, let alone a country.

End of comments.

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