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Long road ahead for Eskom as massive restructuring on the cards

With a debt burden in excess of R440 billion and aging infrastructure, it’s going to be challenging for those tasked with fixing it.

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

CAPE TOWN – There’s a long road ahead for Eskom as it mulls a massive restructuring that’s meant to turn the ailing utility around.

With a debt burden in excess of R440 billion and aging infrastructure, it’s going to be challenging for those tasked with fixing it.

A presentation given to executives last week was leaked and published on Monday.

The document makes clear just what’s at stake for the utility, saying Eskom needed urgent intervention. Text in the document reads: “If we do nothing Eskom will collapse and bring South Africa down.”

It’s a warning many have been sounding, including energy expert Chris Yelland.

‘A fundamental restructuring of Eskom is necessary. Eskom is currently is completely unstainable. The document points out if nothing is done, it will bring the whole of South Africa down.”

As a discussion document, it has little by way of details, but it does lay out the broad plans for the turnaround.
They rest on five pillars, including debt relief which is already in place thanks to a cash injection from the government. It also calls for improved revenue collection, the splitting of the utility into three units, cost-cutting amounting to well over R30 billion and turning operations around.

Last week, Eskom leadership began meetings with unions to discuss their plan and resolved to keep talking to find a way through the high stakes turnaround.

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