Experts: Eskom needs massive recapitalisation

Energy experts suspect the inquiry into Eskom is the direct result of its inability to manage its money.

FILE: Eskom's chairperson Zola Tsotsi revealed the power utility will be suspending four executives as part of an independent inquiry into the business at Megawatt Park in Johannesburg on 12 March 2015. Picture: Reinart Toerien/EWN.

JOHANNESBURG - While Eskom maintains there is no crisis and its managing challenges, energy experts suspect the inquiry into the power utility is the direct result of its inability to manage its money.

Cash flow problems have been cited as one of the issues that will be looked into when an independent inquiry into the current status of the business begins.

Yesterday it was announced that four executives, including CEO Tshediso Matona, had been asked to "step aside" for the duration of the inquiry.

Eskom says the poor performance of generation plants, delays in getting power stations online and cash flow issues are some of the key points that will be looked into.

Energy expert Chris Yelland says all these issues are part of the reason why an inquiry has been launched.

"There are immediate financial issues, its cash flow position, its need for a massive recapitalisation."

Former Eskom employee and mining analyst Ted Blom agrees.

"Eskom is probably short, no less than R500 billion and not the R20 billion that government thought would fix the problem."

Public Enterprises Minister Lynne Brown says Eskom has not been forthcoming with information and often it's not considered as credible, which is why she supports the decision to launch an inquiry and the suspension of the executives.