Picture: REUTERS
Picture: REUTERS

Long-awaited policy movement on the way forward for embattled state-owned power utility Eskom and the economy is expected to be presented to cabinet in two weeks time, minister in the presidency Jackson Mthembu said on Thursday.

The government and, in particular, President Cyril Ramaphosa, have been strongly criticised for failing to come up with a plan to re-ignite economic growth, and address the concerns of investors. This has led to a waning of the initial “Ramaphoria” that greeted his election as president and contributed to the prevailing gloomy business sentiment.

Also of concern is the deterioration in government finances with debt and budget deficit projections much higher than anticipated at the time of the February budget, largely because of the R59bn cash injection into Eskom.

The utility, which is saddled with R440bn of debt, poses a serious threat to the economy. 

Mthembu told the media during a post-cabinet media briefing that the special paper on Eskom and its future would not come on its own but would be presented together with a view on the economy and its performance, and an appraisal of the fiscal situation and how to navigate these challenges. He said the paper on Eskom would be part of a broader presentation by finance minister Tito Mboweni.

“Definitely, a paper is coming to the cabinet. Hopefully it will be at the next cabinet meeting. Yes, there will be a paper on Eskom; yes, there will be a paper on the economy, inclusive of public finances. All these things will come as a package for discussion,” Mthembu said. An integrated cabinet discussion will be held  on all these papers.

The government has indicated that it plans to unbundle Eskom into three units — generation, transmission and distribution — but no specific plans or timelines have been provided. This has created uncertainty, particularly among credit ratings agencies, which were disturbed by the R59bn allocation to Eskom in the absence of this overall framework.

Mthembu said the revised integrated resource plan, which sets out SA’s energy needs and energy sources for the future, is in the cabinet system.

ensorl@businesslive.co.za