“Bold, decisive action will need to be taken to avert Eskom’s crisis,” President Cyril Ramaphosa said of the cash-strapped and management-troubled power utility.
This will be achieved by slicing it into three entities of “generation, transmission and distribution”. Speaking during his State of the Nation Address in Cape Town on Thursday night, 7 February 2019, Ramaphosa said the power utility “is in crisis and the risks it poses to South Africa are great”, warning that if left in its current free fall condition, Eskom could severely damage the economic and social development ambitions of the country.
“To bring credibility to the turnaround and to position South Africa’s power sector for the future, we shall immediately embark on a process of establishing three separate entities – generation, transmission and distribution – under Eskom Holdings.
“This will ensure that we isolate cost and give responsibility to each appropriate entity”, Ramaphosa said.
He said this will also enable Eskom to be able to raise funding for its various operations much easily from funders and the market.
He added that “it is imperative that we undertake these measures without delay to stabilise Eskom’s finances, ensure security of electricity supply, and establish the basis for long-term sustainability”.
He said there was a need to take these bold decisions and decisive action with a turnaround plan for Eskom. The consequences might be painful, but they will be even more devastating if they are delayed.
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