Eskom’s financial woes could have dire impact on consumers – OUTA

The Organisation Undoing Tax Abuse (OUTA) says that the mismanagement of funds at Eskom needs to stop as the parastatal has "wasted more than R1 trillion"

The reported financial woes at Eskom will have severe consequences for consumers if the energy supplier continues to spend money recklessly. This is according to energy portfolio director Ted Bloom of civil society group Organisation Undoing Tax Abuse (OUTA), who warns that Eskom can’t survive if it continues this way.

He says the power utility is in far more debt yet continues to waste money. “This has to stop; they’ve already wasted more than R1 trillion in the past five years,” he says. “I’ve done the calculations. The electricity price is way too much and if they resort to increasing that price, they will kill us.”

READ MORE: Eskom says it has enough money to support its operations

Economic expert Professor Alex van den Heever of Witwatersrand’s School of Governance says the parastatal relied on government bailouts, but that if the government is going to put up the money, accountability is paramount. She says a bailout will put more strain on the ailing economy as it’s an unplanned expenditure. “The government needs to institute a full investigation. Actions need to be taken to ensure accountability,” she says.

Deputy editor of the Financial Mail Sikhonathi Mantshantsha told 702’s Xolani Gwala that in December 2014 when Eskom had R20 billion, it had approached the Minister of Public Enterprises for a cash bailout.

“They [Eskom] said they were running out of cash to pay salaries,” he said.

READ MORE: Eskom proposes bonuses for Molefe, Koko – report

Meanwhile, Eskom’s spokesperson, Khuli Phasiwe, refuted a Sunday Times report that claimed the company was on its last R20 billion, and that it plans to pay bonuses to axed CEO Brian Molefe and suspended acting CEO Matshela Koko. Phasiwe insisted that the power utility is in a better financial position compared to three years ago.

He told EWN on Monday that Eskom’s liquidity has improved. “As a result, in the current financial year, we were able to raise 77% for our requirements of the year. We’re confident that we’ll be able to raise the remainder before the end of the current financial year.”

He added that bonuses were based on performance and will be discussed during the release of Eskom’s financial results on Wednesday.

Extra source: EWN