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Gordhan sees light at end of tunnel for Eskom

He said he would also work on ensuring Eskom remains a reliable and sustainable supply of electricity for the country.

Lethabo Power Station operated by Eskom in the Free State. Picture: Abigail Javier/EWN.

JOHANNESBURG - Public Enterprises Minister Pravin Gordhan on Tuesday said a lot of progress had been made on the plan to restructure Eskom.

The power utility has gone for more than three months without load shedding.

Gordhan gave his Sona debate response in Parliament on Tuesday. The minister vowed to ensure that the power company remained a reliable and sustainable supply of electricity for the country.

* READ: Eskom, Transnet, Denel: Pravin Gordhan's full Sona debate response

Prior to identifying the problems faced by Eskom, the minister highlighted some of the achievements attained by the damned parastatal.

“Today, Eskom has successfully managed the system in terms of its Winter Plan, for 94 days without load shedding. A new head for generation was appointed last week. Of Eskom’s fifteen coal-fired power stations, 10 now have permanent power station managers with full authority,” Gordhan said.

* READ: Gordhan on Denel: No clearer example of the damaging effects of state capture

Eskom was set to receive further funding from the government through an urgent special appropriation bill that would be tabled in Parliament. The bill was expected "to allocate a significant portion of the R230 billion fiscal support that Eskom would require over the next 10 years in the early years.”

Gordhan said the finance minister would announce the appointment of a chief restructuring officer, following consultations in government.

ON ISSUES FACED BY ESKOM

Gordhan said the power utility’s board would address the need for better operational discipline. He said the focus on power must:

  • Employ operations and engineering staff,

  • reduce outages – planned and unplanned – and maintain below 9 500 MW,

  • ensure timeous maintenance and quality of work and,

  • ensure appropriate, good quality coal and adequate supply.

He also said that Eskom had Installed capacity of 45 000 MW vs ±32 000 MW readily available and had an Electricity Availability Factor (EAF) of between 65% →71% - needs to get to 80%.

ESKOM IN REFORMATION

Gorhan said recommendations to restructure the 96-year-old utility was based on both international trends and a study of Eskom itself.

Earlier this year, during his first State of the Nation Address, President Cyril Ramaphosa announced that Eskom would be unbundled into three entitie s: generation, transmission and distribution.

Ramaphosa said this would ensure that government isolates costs and gives responsibility to each appropriate entity.

Gordhan said Eskom’s separation would provide a number of other benefits, including greater transparency of financial and operational performance, in each entity.

He said some of the details being looked into were power transfer policies and contracts, internal structural reorganisation (governance, organisational structure, policies and procedures), financial reporting and auditing processes per business division and establishing detailed cost allocations and service level agreements within the holding company.

While Gordhan was busy preparing to deliver his speech, Economic Freedom Fighters MPs staged a walkout in the National Assembly.

* READ: On a point of order: EFF stages walkout as Gordhan delivers speech in Parliament

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