Efficient Group chief economist Dawie Roodt says Eskom is dying. The only way to save it is to place it under business rescue, restructure the company, and fire thousands of employees.
Speaking to Nuuspod, Roodt said Eskom is hopelessly bankrupt and financially and operationally nearly unsalvageable.
“Eskom has 20,000 workers who should not be there, and they even received big salary increases when there is no money,” he said.
Apart from its financial predicament, the company is collapsing operationally and cannot fulfil its mandate to provide South Africa with enough electricity.
Roodt said the only way to save Eskom is for the government to realise there is a crisis and place it under business rescue.
The company can then be restructured. It will include firing thousands of employees, selling off assets, and getting private sector participation.
All contracts will have to be looked at to ensure they are above board and that Eskom gets what is promised.
Employees facing the chop are likely to protest, which Roodt said will require the South African National Defence Force to protect Eskom’s infrastructure.
Although it is possible to save Eskom, Roodt said it is impossible under the current ANC government with ministers like Gwede Mantashe and Pravin Gordhan.
“The current government doesn’t have the backbone to make tough decisions, like placing Eskom under business rescue and cutting staff,” he said.
He added that moving the power utility from the Department of Public Enterprises to the Department of Mineral Resources and Energy is of no value and can even make matters worse.
There is a lot of political interference and political play behind the scenes at Eskom, which is harming the company.
“It is a ten to fifteen-year process to save Eskom, but the current government don’t have the political will to do what is needed to save the company,” he said.
The private sector is taking over electricity generation already
Roodt said the alternative to placing Eskom in business rescue is that it will go the same route as South African Airways.
“We are in the process of privatising Eskom. Eskom is falling apart, and the private sector is simply taking over where it can,” he said.
He explained that privatisation isn’t a formal policy or ideological stance but simply that the private sector offers services where the state has failed.
Many businesses in South Africa are installing rooftop solar and battery systems or diesel generators to supply their own electricity.
Private solar and wind farms are also developed to provide additional green energy to businesses and households.
The move to private power will inevitably lead to job cuts at Eskom, similar to what was seen at South African Airways.
“SAA had ten turnaround plans, and they all failed. The company was ultimately run into the ground financially and operationally,” he said. “Eskom will go the same way.”
It, therefore, makes sense for the government to lead an orderly process to privatise Eskom instead of what has happened at SAA, which can be disastrous for the country.