Eskom still hamstrung

JOHANNESBURG - Credit ratings agencies such as Moody's regard Eskom still as the single biggest risk to the country's economy.   

Energy experts said the lack of political will to address key challenges at Eskom is hampering the power utility's performance.

This week Eskom announced that the fifth out of the six units at Medupi power station is now operational.

But the facility is still years from completion and it's over budget by more than R60-billion.

Eskom said this is largely due to labour unrest, shoddy workmanship by contractors and because the cost of the project was underestimated.

READ: Eskom suspends senior official

At the same time, the budget for the Kusile power plant is expected to overrun by nearly R70-billion.

That's only if there are no further delays.

"The biggest challenge is to raise money. We're not selling as much electricity as we should," said Eskom spokesperson Khulu Phasiwe.

"Our revenue sales have been stagnant for the last ten years. Eskom needs to do something to improve revenue sales. We also need to cut or contain our costs."

Eskom has nearly R400-billion in total debt, costing it $2-billion in interest payments last year alone.

Experts said fixing Eskom is arguably President Cyril Ramaphosa's biggest challenge as he tries to grow the economy, provide jobs and address inequality in the country.

Energy experts say the lack of political will to address key challenges at Eskom is hampering the power utility’s performance. Eskom's problems include governance concerns, corruption, financial troubles and over-staffing.

Source
eNCA

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