Carol Paton Writer at Large

Eskom could be broken up into two state-owned companies if the cabinet accepts the recommendations of President Cyril Ramaphosa’s expert task team at its lekgotla this week. Ramaphosa is hoping to announce the new shape and size of Eskom in his state of the nation address on February 7. The ANC has agreed to the unbundling in principle. The power utility is in a dire financial position with negative cash flow and a debt burden of R419bn which it is unable to service from revenue. In order to survive it must cut costs, restructure and receive a substantial bailout from government. The two proposed companies were a generation company, which would own and run the Eskom power stations, and a transmission company, which would operate and own the national grid, several people with direct knowledge of the process said. The transmission company would be set up as an Eskom subsidiary with its own board and management. Among the advantages of the structure would be to provide impetus to compe...

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