Eskom: Five-step plan to rescue the SOE leaked to the public

A leaked document from a high-powered meeting this week suggests that Eskom is on the road to recovery. But there’s much more work left to do.

If ever a company was in need of a bright idea or two, it’s Eskom. The SOE has endured a miserable few years, blighted by the implementation of load shedding and the devastating affects of corrupt governance. But light may be drawing nearer to the end of the tunnel.

A leaked document – apparently presented by acting CEO Jabu Mabuza last week – reveals exactly what the firm have in mind to help turnaround their fortunes. It’s understood that the ANC government is ready to give the go-ahead to plans President Ramaphosa made public back in February, and split Eskom into different departments.

Part of the strategy would see the current version of Eskom focus solely on transmission, and another aimed solely at the distribution of the energy supply. This would end up creating another organ of the state, but those behind the blueprints believe it will be easier to manage the utility’s spiralling debt this way. Here’s how it is meant to work:

Eskom’s five-step plan towards recovery:

Debt relief

Firstly, the failing company has managed to raise some much-needed capital. It’s swallowed multi-billion rand bailouts before, but now it has a huge warchest – and an increased sense of direction – to push things forward. Around R130 billion will be given to the firm over the next three years.

Revenue management

So, Eskom aren’t performing and it’s hurting the economy. Who has to foot the bill? That’ll be us, the consumer. They are still trying to push for further tarriff increases, despite sealing a 22.3% rise in rates by 2022. They are also planning to chase down their misappropriated funds – as they successfully managed against Trillian this year.

Business separation of Eskom

This is the halfway point of their “Stabalise, Separate and Grow” mantra. This will bring the biggest legal and logistical upheaval of the whole operation, breaking Eskom into multiple entities.

Cost initiatives

Quite frankly, a host of bailouts and restructuring won’t be enough to stage a recovery for Eskom. They need sustainable plans for the future, and that starts with learning how to save money, rather than spend it. The group are looking to shave R33 billion a year from their operational costs.

Eskom’s operational stability

This is the part of the plan that looks to secure Eskom’s energy supply. The final step on this long road home is to ensure that energy is procured in an affordable, reliable manner in order to avoid more load shedding debacles.

Article by Tom Head, The South African