Registered users can save articles to their personal articles list. Login here or sign up here

Eskom ‘is not on the brink of financial collapse,’ Gordhan says

Minister says the government has the problem ‘well under control’.

South Africa’s state-owned power utility “isn’t on the brink of financial collapse” and the government has the problem “well under control,” public enterprises minister Pravin Gordhan said.

His comments come after documents last week showed the state was forced to pay R5 billion ($353 million) in emergency funds so that Eskom – which is battling with declining revenue, higher costs, and keeping the lights on — could meet obligations.

Read: SA forced into emergency aid payout to troubled Eskom

“We have had an extreme financial difficulty as a result of state capture — the damage that has been caused has been huge,” Gordhan said on Johannesburg-based Talk Radio 702. He was referring to the process in which billions of rand have been looted from government coffers through the use of political connections to secure appointments of allies to key state posts and win contracts. “We understand what changes need to be made.”

The government announced a record R69 billion bailout for Eskom in February to be paid over three years. Of that, R23 billion is pledged for the current financial year. Based on the 2% limit of the appropriated national budget, only R17.7 billion can be transferred. The remaining balance will have to be subjected to the normal appropriation process when parliament is constituted after the May 8 election.

The R23 billion required a special bill that didn’t come up before parliament completed it business before the vote The National Treasury had targeted disbursement between August and October 2019.

© 2019 Bloomberg L.P
 
Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.

COMMENTS   31

To comment, you must be registered and logged in.

LOGIN HERE

Don't have an account?
Sign up for FREE

Who believes these people? Pure electioneering

Seems there are a lot of doomsday people around.

I do not know if you have heard about the extra 800 MW delivered eight months ahead of target by Eskom?

Thus the chances of load shedding are very low.

Too much negativity is not good for anyone.

But Mdupi or what ever it is called is years behind schedule? And you get all excited about 800 MW?

It is the chronic bailouts that is the problem……the credit rating agencies doesn’t like this and I don’t like this.

Just wait until after the election…..then you’ll see the real skeletons come out.

Gordhan, the pharmacist dispensing Vitamin B pills to the populace, blissfuly unaware that his staff is manufacturing industrial quantities of tik in the next room.

It was reported today how sports minister Tokozile Xasa, was going to wrap Athletics SA over the knuckles for missing its transformation targets for 2017/18. The report stated: “We are most encouraged by the areas where we have made progress, including black presidents and black board members,” Xasa said. However, the fact is there is nothing left of Athletics in SA today, no big meetings, no sponsorships, no broadcasting of events, just nothing. The SA National Senior champs is a joke with school kids competing because there is nobody else left. But they are still relentlessy pursuing transformation targets. Just like Eskom being R140 bn in red, but who cares? The numbers are right and that is all that matters. Totally removed from reality.

This is Eskom; a “transformed”, BEE and AA perfect cargo cult, Dunning Kruger pretence of being a national electricity generator. but in fact enriching the ANC, its tenderpreneurs and party cadres The fat chemist just perpetuates the charade.

Just another anc own-goal from a bunch of hypocrites who need to dominate colonial sports and moreover dictate and impose their racist regulations, having never invented one of their own….they just don’t get the irony!

Bit like that dreadful colonial electricity thing introduced by people they hate and despise!

Had enough of being “managed” by fools!

If that were true, why did the discus give them R 17 billion ?

TO PAY SALARIES ? ? ?

He is correct actually. Eskom is sitting on a heap of government guarantees. So, if we want to be factually correct, it is the government that is on the brink of financial collapse. Take it one step further – Luthuli House is on the brink of collapse.

Quite correct ! Eskom is too big to fail. It is squarely the Govts problem.
I find it amusing that he blames the huge financial difficulty on state capture but where is the stolen money ? Where are the convicted criminals ?

Disagree. More like it is squarely the Taxpayers’ problem. That’s you and me (assuming you live in SA). No will to recover the stolen money – that will affect more than the majority of cadres, and that is simply not the done thing. Rather focus on “stolen land”. That way the comrades can share out the best parcels of EWC land among themselves. Then the stolen money & the stolen land can start working together for the criminal cadre cabal.

in the words of Fleetwood mac – tell me lies, tell me lies, tell me sweet little lies…. the ANC lurches from one self inflicted crisis to another. it uses the tried and tested everyone gets away with it band aid by forming a commission of enquiry which is basically just a airing of our s__t stained laundry for all the world to see. Eskom has hit rock bottom and started to dig..

Thank you mr Gordhan. You’ve just helped me to connect the dots (for my early retirement plan), which I will share with you:
1. Install PV system to provide my own power and excess to be sold to my neighbors at cost slightly lower than Eskom, but higher than Eskom during periods of blackouts.
2. Excess power to be sold in the form of pre-charged electric batteries to be used for blackouts. This is probably the simplest way as it will be cheaper than running generators and obviously free power provided by the sun.

The DA will tax you for it if you’re in one of their municipalities…

Payment to be strictly cash (or bitcoin!)…

@AP. The solar panel inspector will come knocking on your door to register these solar panels. Next step is a tax / levy on these solar panels. Checkmate.

Pravin seems to have his marbles somewhat – thankfully he is no longer minister of finance.
Under normal business conditions a company that is seeing a decline of product sales, escalating input costs and massive loan agreements to service in the not too distant future would normally apply for business rescue to keep the hounds at bay. The problem is further exacerbated by the municipalities failing to collect timeously what is due to them in terms of electricity consumption costs, and then to top it all a tenant of “Princess” Sisulu has outstanding rates and taxes running to close on a R million and nobody thought to cut off services after a month or so’s defaults. Oh to be a privileged person in this country

It’s all good up to May 7th …. after that, it all falls apart; again.

A contrarian view but the sooner Eskom collapses the better because our current day ANC racists must be forced to forego their race-obsession and treat all South Africans equally, they will not do so voluntarily.

The government have the problem ‘well under control’. So no need to worry about. OK?

Mr Gordhan, it’s it the bowl already and the anc have flushed it already…..can the BS and electioneering codswallop!

PG what would have happened if the government did not bail out Eskom; when the recent Chinese loan did not materialise? Happened as recent as April 2019

The zupta years so soon forgotten? Need to crucify PG instead? Sickening the self righteousness!

Let’s see… … …
Mr Gordhan was Commissioner at SARS when “ANC connected so protected” became entrenched.
He was Minister of Finance during the “wasted years” reign of Moyane
He appears to be one of habitual liar and member of the top state capture family Cyril Ramaphosa’s closest allies.

The ANC set up a War Room after the 2008 round of load shedding to ensure no more blackouts. This was headed by Cyril “DidntKnowNuffing” Ramaphosa

The factors behind load shedding — corruptheid, tenderpreneurs, AA, BEE, maintenance failures, non-payment by ANC municipalities and townships — have not changed. Meanwhile, Eskom continues to be one of the world’s leading polluters.

Under Gordhan’s watch, the solution to load shedding, purchase from private producers, retrenchments and privatisation, continue to be blocked.

And we should believe him?
https://citizen.co.za/news/opinion/opinion-columns/2122001/brace-for-post-poll-power-shifts-and-power-blackouts/

Load All 31 Comments
End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
Insider GOLD
ONLY R63pm

Moneyweb's premium subscription is a membership service which will give you access to a number of tools to take charge of your investments.
Or choose a yearly subscription at R630pa - SAVE R126

Get instant access to all our tools and content. Monthly subscription can be suspended at any time.

Podcasts

SHOP NEWSLETTERS TRENDING CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company:
server: 172.17.0.2