We've got news for you.

Register on BusinessLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now

Eskom needs to move away from its reliance on tariff increases and look to more creative ways of maximising revenue, says new group CEO Phakamani Hadebe. Otherwise, he warns, it will be sucked into a fatal utility death spiral. "We are not yet fully in that death spiral, but the signs are there that we will be going there." This is when utilities rely on higher tariffs for survival, which means fewer customers and fewer sales, requiring even higher tariffs. "It is created by utilities that do not adjust to changing times," Hadebe says. "That, unfortunately, includes us. We need to avoid a situation where the whole business relies on tariff increases." Eskom's latest request was for a 19.9% tariff increase. The National Energy Regulator of South Africa gave it 5.2% and told it to reduce its costs. Hadebe and his team have been working on a recovery plan which addresses how to maximise revenue and reduce costs. "These are the critical things," he says."It's no good hoping for the best...

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 articles from our international business news partners; ProfileData financial data; and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.

Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now