Adjusted for inflation, the current Eskom tariff is the highest it has ever been and yet the regulator is being asked to allow increases of about 50% over the next three years. Motivation for this request is the fact that Eskom cannot fund its current and future expenditure at current revenue levels. This is the immediate problem. The solution offered by the Presidential Eskom Sustainability Task Team is to split Eskom into three parts under a holding company. The reason given is that this would, at some time in the future, enable areas where excessive expenditure arises to be identified. Scepticism about the effectiveness of this solution and a suspicion that it is the prelude to the piecemeal break up and privatisation of Eskom is probably justified. Why this would be a disastrous move is the subject of another article. The purpose of this one is briefly to set out the real causes of the conditions now being experienced by Eskom. The objective is to guide what should be done to re...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, Morningstar financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00.