Enoch Godongwana announced on Wednesday that government would help Eskom’s debt burden by taking over R254 billion of the utility’s debt. Photograph: Phando Jikelo/African News Agency (ANA)
THE fallout from the ailing power utility Eskom’s former CEO, Andre de Ruyter, has the country in a tailspin as politicians and the Central Energy Fund (CEF) scrambled on Thursday to dispute the claims made during an explosive interview.
This comes after Eskom announced that De Ruyter would immediately step down from his role as the power utility’s head late on Wednesday evening.
Eskom spokesperson Sikhonathi Matshantsha on Thursday told Talk Radio 702 that the board felt De Ruyter had brought the organisation into disrepute when he made several explosive claims in an interview with e.tv.
In the interview which aired on Tuesday night, De Ruyter said there was rampant corruption at the power utility and that undisclosed ministers were interfering with operations at the utility.
He also said the undisclosed leaders from the ANC were aware of corruption that was happening at Eskom and also that the utility served as the ANC’s “feeding trough”.
He said criminal syndicates in Mpumalanga were stealing around R1 billion a month from Eskom, and nothing was being done about it.
ANC secretary general Fikile Mbalula slammed De Ruyter on Thursday, saying it was unfortunate that he had exposed his right-wing attitude and had opportunistically ventured into the political arena.
“Now that he has exposed his political standing and ideology, he should have stood back and not taken up the position.”
Mbalula has confirmed that they would take De Ruyter to court to prove the allegations he made that the party was corrupt.
Mbalula said De Ruyter must defend his statements in court after he said the ANC was mired in graft allegations at Eskom.
He said the ANC had never sent anyone to steal at Eskom.
The lawyers for the ANC would write to De Ruyter to prove those claims within seven to 10 days, he said.
The Central Energy Fund (CEF) also said on Thursday that it had noted a misleading media report aired on e.tv’s news channel on Tuesday night and repeated on eNCA’s Check Point.
What happens to the bail-out billions announced by the finance minister during the budget speech?
Meanwhile, Finance Minister Enoch Godongwana announced a R254 billion debt relief intervention provided by the government to help ease the R423 billion debt the power utility has incurred.
On Thursday, the country was left with more questions than answers, with one of the major concerns being: what will happen to the money that that the government had set aside for Eskom’s debt?
Will it be stolen via the alleged criminal cartel that the former CEO referred to during the interview, when he said an estimated R1bn was syphoned off monthly from the state-owned entity.
Eskom will not be spending capital on any greenfield projects for the next three years as part of the conditions attached to the R254bn debt relief from government.
Instead, the utility will focus on maintenance of the existing generation fleet to improve the availability of electricity, while additional new generation capacity will be derived from independent power producers and the southern African power pool.
Momentum Investments economist Sanisha Packirisamy, however, told Business Report that the funding for Eskom from the government was conditional and limited loss through corruption.
Packirisamy said, “The funding for Eskom is conditional and ringfenced to spending on maintenance. The monies are intended for repaying capital and interest and in that regard limits loss through corruption. The money helps on the financial side but to some extent also the operational side - if Eskom doesn't have to pay interest, then it can refocus those funds elsewhere on fixing the energy availability factor.”
She added, “The operational side is still heavily constrained and from a technical perspective a number of units (Kusile predominantly) will take time to come onstream and as such we will still likely have load shedding for much of this year and next.”
The proposed debt relief has very strict conditions for Eskom, including restricting the power utility from using proceeds from the sale of non-core assets for capital and operating needs.
Eskom may also not implement remuneration adjustments, or golden handshakes, that would negatively affect its overall financial position and sustainability.
Godongwana said these conditions also required Eskom to prioritise capital expenditure in transmission and distribution during the debt-relief period, and for the company to focus on maintenance of the existing generation fleet to improve the availability of electricity.
Departure of CEO is negative for sentiment and morale
“The departure of the former CEO is negative for sentiment and morale at the entity. A lot will depend on the successor, Calib Cassim, given that he will inherit a struggling entity. Treasury's recent announcement helps to alleviate some uncertainty on the financial side,” she said.
The Treasury has appointed an international consortium with extensive experience in the operation of coal-fired power stations to review all plants in Eskom’s coal fleet and advise on operational improvements.
The consortium consists of VGBE Energy, Dornier Power, KWS Energy, RWE Technology, and Steag Energy.
Its review is scheduled to conclude by mid-2023, and Eskom is required to implement the operational recommendations emanating from this independent assessment.
BUSINESS REPORT