How Eskom is crippling the economy
New management has vowed to rehabilitate the utility, but it has its work cut out digging it out of the R419bn debt hole
It’s déjà vu for SA as a chronic power deficit plunges large tracts of the country into darkness and casts a pall over the already struggling economy. Eskom, which supplies most of the country’s electricity, has instituted daily rolling blackouts since November 29 to avert a total collapse of the grid — as it did in 2008 and 2015. Outages are set to persist for at least several months as the state utility’s new management contends with maintenance backlogs, construction delays and coal shortages. Eskom is also afflicted by deep structural and financial problems. It has racked up R419bn in debt that it’s battling to service, and it is not selling enough power to cover its costs. While it anticipates a loss of more than R11.2bn in the 12 months through March, its ability to fire thousands of surplus workers is constrained by militant unions and a government that is gearing up to contest elections next year. The utility, which has depended on state guarantees and bailouts for years to ...
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