Chinese offer help with blackouts, Pravin Gordhan tells MPs

Eskom interim CEO Calib Cassim met “various entities” in China to discuss how they could assist in addressing the crisis facing SA’s electricity sector.

Minister of public enterprises Pravin Gordhan said Cassim and two other Eskom representatives participated in an official visit to the People’s Republic of China to assess the solutions being offered and “interact with various entities”.

Gordhan, who appeared before parliament’s standing committee on public accounts (Scopa) on Wednesday, would not provide detail on which entities the representatives met or what they discussed.

“There was an offer of assistance to address the current environment that we find ourselves in from various entities in China. I am not qualified to assess what is needed or what is being offered, which is why the acting CEO and two others [from Eskom] were there to interact with the various entities and establish for themselves what could be done,” Gordhan said.

SA has received similar offers from other countries, he said. “Sometimes [these interactions] result in positive outcomes, but sometimes the fit isn’t right.”

Eskom referred Business Day’s questions about the nature of the engagements between Eskom and Chinese entities to the department of public enterprises.

“We are taking the lead from the [department]. The minister has to report back to the president and parliament first about the outcome of the trip,” said Daphne Mokwena, interim Eskom spokesperson.

Locomotive delivery

Department of public enterprises spokesperson Ellis Mnyandu offered only the comments made by Gordhan during his engagement with Scopa.

The department previously said Gordhan would lead a delegation to China as part of efforts to fast-track the delivery of locomotives and spare parts by Chinese state-owned CRRC e-Loco to Transnet. No mention was made before the trip of Eskom’s participation.

The department could not offer additional comment on the nature of the engagements Eskom conducted in China “due to the sensitivities involved with such processes”, Mnyandu said.

“The minister indicated that much of the work is still a work in progress,” he said.

In response to some of the questions raised by MPs on Wednesday, Gordhan said “significant parts” of the unbundling of Eskom into three separate entities for transmission, generation and distribution will be completed before year’s end.

In preparation the government has started modelling exercises to look at how the new transmission company would “bring in cash and generate funding of its own”.

“We have had two or three interactions with the State Grid Corporation of China, which is the largest transmission company in the world, to look at the way they run their show,” Gordhan said.

The State Grid Corporation owns shares in transmission companies in countries such as Portugal, the Philippines and Brazil.

Among the conditions the National Treasury attached to its three-year, R254bn debt relief programme for Eskom is an agreement reached between the utility, the Treasury and the public enterprises department to design a mechanism for building new transmission infrastructure that will allow for extensive private sector participation in the development of the network.

According to Eskom’s transmission development plan about R130bn needs to be spent on building 100 new substations and 8,500km of transmission lines by 2030 to connect new generation capacity to the grid.

As part of the debt relief conditions the Treasury said those Eskom old coal-fired power stations that “can be resuscitated to original equipment manufacturers’ standards” should be concessioned out to private operators.

erasmusd@businesslive.co.za