President Cyril Ramaphosa says Eskom is left with money that will only sustain it for only four months.
He said this during the state of the nation address in Parliament on Thursday night.
“With the current committed funding from government, outlined in the 2019 Budget, Eskom has sufficient cash to meet its obligations until the end of October 2019,” Ramaphosa said.
He added that a new CEO of the Eskom is expected to be announced soon after Phakamani Hadebe stepped down last month after only one year at the helm of Eskom. Ramaphosa said Eskom has to be saved, failure to do so many have dire consequences. “
For Eskom to default on its loans will cause a cross-default on its remaining debt and would have a huge impact on the already constrained fiscus.We will therefore table a Special Appropriation Bill on an urgent basis to allocate a significant portion of the R230 billion fiscal support that Eskom will require over the next 10 years in the early years. This we must do because Eskom is to vital to our economy to be allowed to fail,” added Ramaphosa. The package to rescue Eskom will be announced by minister of Finance Tito Mboweni. To bring stability to the organisation a Chief Restructuring Officer would be appointed to bring back the energy providing company back to its feet.
“We will soon also be appointing a Chief Restructuring Officer, who will be expected to reposition Eskom financially with careful attention to the mix between revenue, debt and cost structure of the company,” said Ramaphosa. He said the government is going to ensure that people pay for the electricity they use. “ Eskom is working with government and other stakeholders to address its overall debt as well the debt owed by municipalities and individual users. As a country, we must assert the principle that those who use electricity must pay for it,” he said.
