DUMA GQUBULE: How to fix Eskom: let the state take over all its debt
Bailouts are a waste of money that only deal with the symptoms of the crisis
Since cutting corners got us into this mess, there should be no budget constraint when it comes to Eskom. The cost of fixing Eskom will be far less than the cost of this never-ending state of economic and social disaster. From 2018 to 2022 power blackouts cost the economy R1.2-trillion, based on a gazetted cost of unserved energy of R87.75c/kWh.
The financial mess started in 2007, when Eskom ramped up its capital spending after years of neglect. In the 2009 annual report former chair Bobby Godsell wrote: “It is not possible to fund the first major expansion of our electricity grid for several decades from revenues generated from tariffs alone. The growth of a business is usually funded by a sensible balance between the owner’s equity, accumulated reserves and debt. We need to mobilise greater equity resources.”..
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