President Cyril Ramahosa says Eskom is in crisis and the risks it poses to South Africa are great. He also said Eskom could severely damage the economic and social development ambitions of the country. Courtesy #Dstv403
- Update: Watch President Cyril Ramaphosa's State of the Nation Address here.
CAPE TOWN – President Cyril Ramaphosa has announced that Eskom will be split into three separate entities.
Generation, Transmission and Distribution will fall under Eskom Holdings.
Ramaphosa made the announcement during the State of the Nation Address.
The president said in order to avoid financial crisis in a few years time, the power utility needs to develop a new business plan.
“Eskom is in crisis and the risks it poses to South Africa are great,” Ramaphosa said. “It could severely damage our economic and social development ambitions.
“We need to take bold decisions and decisive action. The consequences may be painful, but they will be even more devastating if we delay. “In responding to this crisis, we are informed by the need to minimise any adverse economic cost to the consumer and taxpayer.”
Ramaphosa said the split will ensure that cost is isolated and responsibility given to each appropriate entity.
“This will also enable Eskom to be able to raise funding for its various operations much easily from funders and the market,” he said.
“Of particular and immediate importance is the entity to manage an independent state-owned transmission grid combined with the systems operator and power planning, procurement and buying functions.
“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.”
The ailing power utility is struggling under a massive debt of over R400-billion.