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Eskom needs 7 years to reach financial sustainability

The power utilities requested a 19% tariff increase for the 2018/19 financial year.

Eskom's Megawatt Park offices in Sunninghill. Picture: EWN

CAPE TOWN – Eskom Chief Financial Officer Anoj Singh says it will take at least seven years for the parastatal to become financially sustainable.

That's part of the reason the power utilities requested a 19% tariff increase for the 2018/19 financial year.

Eskom has on Wednesday briefed Parliament's Select Committee on Communications and Public Enterprises on the 2.2% electricity hike that will come into effect for municipal customers from the first of July.

Eskom says despite only being allowed to increase electricity prices by 2.2% to direct customers from April, it's been keeping the lights on and has not been making use of expensive diesel.

But with the current multi-year determination coming to an end in March 2018, Eskom has now submitted a new, single-year application to the National Energy Regulator of 19% for the 2018/19 financial year.

Singh said: “In terms of being able to navigate Eskom out to a point where it’s financially sustainable, it will take a number of years depending on the tariff trajectory that we get and the cost efficiencies that we can extract as an organisation. And a journey towards there is the 19% tariff application that we've submitted.”

Municipalities still owe Eskom around R10 billion.

The power utility says only around half of the more than 60 municipalities responsible for this debt are meeting payment obligations.