Eskom 2022/23 Annual Report; with Deputy Minister

Eskom The Portfolio Committee on Public Enterprises met in Parliament to be briefed by Eskom on the entity’s 2022/23 annual report and financial statements. Eskom stated they were not proud of the results described in its annual report and financial statements, which indicated a net loss of R24 billion, a low energy availability factor (EAF) of 56%, and load-shedding on 280 days. Eskom had created a generation recovery plan to address these issues, and had reduced the use of Open Cycle Gas Turbines (OCGT), which was critical to reducing the record financial losses, increasing the EAF, and improving the entity’s financial sustainability. It indicated that the huge municipal debt had also contributed to its poor results. The board had submitted the names of three candidates to the Minister for the role of Group CEO. They were hopeful that the appointment process would be concluded by the end of 2023. The Committee urged Eskom to be thorough in its due diligence, and ensure that the appointed CEO had the relevant experience within the engineering field. The Committee was frustrated with the stage four load-shedding that had commenced earlier that morning. There were concerns that stage four would continue indefinitely throughout the festive season. Eskom indicated they could not specify whether this would be the situation, but they would work to prevent it. The Committee criticised Eskom for using technical jargon when presenting, which made it difficult or confusing for members of the public to understand what was being said about the entity. They asked it to present its information in simpler terms for ease of understanding in future. The Committee was concerned about the R23.9 billion loss Eskom had reported, and asked what was being done to mitigate this. It was suggested that this loss and the low levels of income indicated that Eskom was commercially insolvent. However, Eskom denied that it was insolvent. The Committee raised the issue of Eskom’s tender for a new logo and corporate identity, as it felt that there were more pressing issues for it to be concerned about, such as ending load-shedding. Eskom responded that this had been necessary because of the legal separation of the transmission, distribution and generation components of the entity. An overriding concern was the need to reduce the borrowing required to service its debt. The more it borrowed, the more interest it had to pay, which in turn increased the amount it had to borrow, which was a serious debt trap.