South Africa’s main power utility, Eskom, is “too big and too important for the country to be allowed to fail”, President Cyril Ramaphosa has said.
Speaking at the Investing in Africa Mining Indaba, a summit held in Cape Town on Tuesday, 6 February 2019, Ramaphosa admitted that Eskom was currently facing significant operational, financial and structural challenges, but government was giving detailed attention to the crisis, he said.
The cash-strapped state-owned firm is expected to post a US$1.42 billion loss for the financial year to March, up from the $1.07 billion forecast during the mid-year results, as overall expenses widened during the period.
“The energy, transport and water sectors — all of which are important for the mining industry — represent the bulk of the infrastructure investment spending plans that the government is planning for the years ahead”, Ramaphosa said.
“Eskom’s contribution to the health of our economy is too great for it to be allowed to fail. It is too important and is too big to fail, and we will not allow it to fail. Restoring and securing energy security for the country is an absolute imperative.”
“In the coming days, we will be announcing a package of measures to stabilise and improve Eskom’s financial, operational and structural position and to ensure security of energy supply for the country. Restoring energy security is an absolute imperative for the country”, the president said.
Ramaphosa is expected to announce this package of measures, or give a strong indication of what it would entail to keep Eskom floating during the State of the Nation Address on Thursday, 7 February 2019.
It is reported that government might push for partial privatisation of some operations within Eskom, a development critics of state owned enterprises have long argued for the power utility.