From bailouts to Moody's and restructuring: Eskom's week of woes
Power utility Eskom made numerous headlines this week, from its government bailout to Moody’s credit rating, shedding jobs and restructuring.
Finance minister Tito Mboweni announced during the national budget speech in Parliament on Wednesday that Eskom would receive a bailout of R23bn a year for the next three years.
Mboweni also announced that a chief reorganisation officer would be appointed, in consultation with public enterprises minister Pravin Gordhan, to oversee Eskom’s separation process.
Credit ratings agency Moody’s expressed concern about government’s ability to keep spending pressures under control should economic growth remain weak, Business Day reported.
“Unless and until a clear adjustment path is tabled, Eskom will remain the source of contingent liability risks, weighing on SA’s fiscal strength,” Moody’s said in a report on Thursday.
Cosatu weighs in on reorganisation of Eskom
The trade union’s talks with Eskom on its reorganisation reached a deadlock on Tuesday.
At the State of the Nation Address on February 7, President Cyril Ramaphosa announced that the power utility would be split into three units – generation, transmission and distribution.
Cosatu has opposed the reorganisation of Eskom.
The union federation said both parties agreed to meet again next week, after its central executive committee meeting.
Resizing Eskom management
Minister Pravin Gordhan said cost-cutting measures were part of the plan to restructure Eskom.
Cutting costs included reducing the number of managers. Gordhan said Eskom’s salary bill continued to increase and the bloated layers of management were a concern, Business Day reported.