https://www.miningweekly.com
Business|Coal|Financial|Power|Solar|Equipment|Operations
Business|Coal|Financial|Power|Solar|Equipment|Operations
business|coal|financial|power|solar|equipment|operations

Eskom CEO says 'days of surprises' over as problems exposed

17th April 2019

By: Bloomberg

  

Font size: - +

Almost 15 months into the job, and the boss of South Africa’s state-owned electricity company is getting to grips with issues spanning corruption to defective power plants that threatened to collapse the grid.

“The days of surprises are over,” Eskom Holdings CEO Phakamani Hadebe said in an interview Tuesday. “We just have to speed up the process of turning things around.’’

Hadebe said a “breakdown in corporate governance’’ and the financial viability of the business were the biggest challenges when he was appointed after President Cyril Ramaphosa took over leadership of the country. The CEO also faced increasing operational issues, forcing Eskom to implement periodic power cuts from December through March. Now the situation is under control, he said.

The utility, which provides 95% of the electricity to the most industrialized nation in Africa, announced earlier this month a plan to minimise power cuts after an assessment with a technical review team identified the root causes of unplanned breakdowns.

“We know what needs to be done and we have an idea of how it should be done and we’re in a better space now,’’ he said. “We have reason to have high expectations.’’

The cost of the new Medupi and Kusile plants has ballooned to more than R300-billion, and the discovery of defects will add further to expenses. Still, Hadebe said there are encouraging signs for the next boilers to come online. A new unit at Kusile was synchronised to the grid on April 14, the utility said.

DEATH SPIRAL
Ramaphosa in February announced plans to divide Eskom into generation, transmission and distribution units, as it joins other utilities in experiencing the so-called “death spiral.” That’s where demand is in terminal decline as alternative sources of electricity become available such as solar panels and clients switch to more efficient equipment like light emitting diode, or LED, lights.

The split helps to achieve transparency and will allow for “clarity of operations” and more accountability by managers for the performance of stations and units, according to Hadebe.

Revenue will continue to drop by one percentage point a year, which is about R2-billion, he said. Eskom can make a difference by reducing costs, primarily through procurement and coal purchases, Hadebe said.

TREASURY BACKGROUND
When Hadebe worked at the Treasury until 2008, one of his responsibilities was to look at the financial oversight of state-owned companies including Eskom. The utility’s debt has since increased more than 11-fold to R450-billion, he said.

The malfeasance, which boosted Eskom’s debt and the tackling of which was a large part of his original mandate, has largely been addressed, according to Hadebe.

“While there might be pockets of corruption, it’s not that the tentacles start from the board,’’ the CEO said.

Edited by Bloomberg

Comments

Showroom

Stewarts & Lloyds
Stewarts & Lloyds

Stewarts & Lloyds today supplies steel and tube, pipe and fittings, valves, pumps, irrigation, fencing, profiling and roofing products. The cash...

VISIT SHOWROOM 
WearCheck
WearCheck

Leading condition monitoring specialists, WearCheck, help boost machinery lifespan and reduce catastrophic component failure through the scientific...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.12 0.159s - 110pq - 2rq
Subscribe Now