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Calls for restructuring at Eskom seem to be gaining ground, with Finance Minister Nhlanhla Nene stating that this is top of the agenda at a recent conference. “Beyond the discussions and the negotiations on the salaries, what is important is actually beginning to restructure Eskom.It is on top of our agenda to get Eskom on a sustainable platform,” he said.

Eskom likely to be restructuredA South Africa-focused panel discussion at the Africa Energy Forum had also discussed the need to restructure the state-owned utility, concluding that while Eskom needed to be restructured, so too did the energy industry as a whole. National Energy Regulator of South Africa (Nersa) chairperson Jacob Modise said that not only does Eskom need major restructuring, as a monopoly, the utility has made South Africa’s economy suffer. “Its uneconomical decisions have affected the whole energy industry,” he said.

According to Karen Breytenbach, head of the Department of Energy’s (DoE) Independent Power Producer Office, South Africa is in a restructuring phase with regards to its energy industry, and Energy Minister Jeff Radebe has shown commitment towards progressing the country’s diversified energy mix and has a vision for the country going forward. The DoE plans to put out a tender for a further 1 800 MW of renewables capacity under bid window five of the Renewable Energy Independent Power Producer Procurement Programme in November.

Speaking at a Business Leadership South Africa (BLSA) event, Eskom Chairman Jabu Mabuza said the utility was in the “unfortunate situation” of having 48 000 employees today producing 47 000 MW of energy, as opposed to 36 000 people producing the same amount 10 years ago. “We have had a situation that the revenues have grown by an average of 12% over the 10 years, yet sales have grown by 0.1%. The World Bank has done a study that compares Eskom with other peer similar utilities and they said Eskom is twice the number of heads that it needs for equivalent sized type companies,” he said

“After harmonising the work done by the World Bank to include all of the extras that Eskom offers compared to its peers in the study, we found that we may be a third of a bit overweight. Sales can’t be increased overnight, so you have to look at costs. Our costs are in two major areas: in our primary energy, and labour costs. We are not able to collect most of the debt that is lying with the municipalities for a variety of reasons.”

Image Credit: Flickr/GovernmentZA: https://www.flickr.com/photos/governmentza/22222786558/

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