Eskom is ‘more than a money problem’ – Godongwana

Finance Minister Enoch Godongwana said Eskom’s failure goes beyond financial constraints, pointing to structural problems plaguing the utility, such as corruption and mismanagement.

Godongwana told SABC that the National Treasury is taking a hard stance on enforcing the conditions attached to Eskom’s debt relief.

The minister acknowledged Eskom’s struggle with corruption, saying financial assistance from the Treasury can only go so far.

“It’s more than just money that’s a problem at Eskom. Several illegal activities are undermining Eskom’s performance, and we need to deal with that issue decisively,” said Godongwana.

While investigations into Eskom’s corruption remain ongoing, the minister emphasised the need to impose strict rules on the utility’s finances.

“This new support we’ve given to Eskom has got conditions, and Eskom has got to meet those conditions,” he said.

Last year, the Treasury allocated a R254 billion debt-relief package to Eskom, with a strict set of conditions –

• Eskom must prioritise capital expenditure in transmission and distribution.
• Eskom must focus on maintaining its existing generation fleet to increase the energy available.
• The relief is only to be used to settle debt and interest payments.
• Eskom must implement the recommendations from an independent assessment of its operations commissioned by the Treasury.

The Treasury has shown that it will take a hard stance to enforce these conditions and crack down on corruption at Eskom.

In his 2024 Budget Speech, Godongwana revealed that Eskom is set to lose R4 billion of its debt relief over the next two years after it failed to comply with all Treasury’s conditions last year.

Corruption has been an ongoing challenge at Eskom and is a contributing factor to South Africa’s high levels of load-shedding, which peaked last year.

Last year, former Eskom CEO Andre de Ruyter revealed corruption at a national scale.

In February 2023, De Ruyter stepped down from his position as CEO one month earlier than his scheduled retirement date. He detailed the corruption at Eskom in an explosive interview with eNCA before going into hiding for much of 2023.

The former CEO claimed that around R1 billion was stolen from the power utility every month. He said multiple crime syndicates were stealing and sabotaging resources – including coal – in a highly organised fashion.

Public Enterprises Minister Pravin Gordhan echoed De Ruyter’s claim in November 2023.

Appearing before the Standing Committee on Public Accounts, Gordhan said law enforcement has still not caught the ”real ringleaders“ of corruption at Eskom.

In December 2023, the Hawks arrested three suspects for stealing equipment from one Eskom power station and selling it to another, costing the state-owned enterprise R1.04 million.