According to the DA, South Africa’s State-Owned Enterprises (mainly Eskom and SAA) have racked up losses to the tune of R96 billion over the last two years. This is based on the National Treasury’s Consolidated Financial Statement report.
Most of our SOEs are bankrupt, unable to provide adequate services, and Eskom’s situation in particular poses a massive risk to our economy and society as a whole.
“We cannot be sentimental about SOEs when they add little to no value to the people of South Africa and the economy. The country’s is in crisis, it therefore requires urgent reforms, starting with Eskom.”
President Ramaphosa has been mulling over the idea of closing Eskom’s polluting (and horribly ineffective) coal plants in favour of bringing in renewable energy – one of the plans submitted by a task team put together to rescue the doomed energy giant.
Eskom alone has incurred over R440 billion in debt, and is expected to record another loss for the upcoming financial year. In the meanwhile, in order to keep the power utility solvent (and save South Africa from being hurled headlong into the dark ages), the government will have to continue funnelling funds into it – with a rumoured R230 billion bailout package currently being prepared for this exact purpose.
(Even though several municipalities and SOEs – such as Denel – are currently struggling to pay employees, and the SABC is also standing in line for a hand-out.)
Of course, this won’t be nearly enough to sustain the company over the next decade, and many other steps will need to be taken to rectify the problems – including the severe lack of competent employees.
Back in February, trade union Solidarity launched a website for experienced engineers and technicians to offer their skills to Eskom – a list that grew to 480 skilled and experienced professionals. This list was offered to Eskom’s COO and HR department, as well as Minister of Public Enterprises Pravin Gordhan, but not a single person on the list has been contacted.
So, Eskom’s wage bill is bloated, employing too many people, most of whom just aren’t competent at their jobs. Operation and maintenance costs are growing by the day. The coal-fired plants are sluggish. Municipalities just can’t paying their bills. And today, on Monday 1 July, the price of Johannesburg electricity is going up.
Following NERSA’s decision to grant Eskom a tariff increase of over 41%, the City of Johannesburg will see increases to municipal rates take effect as of today, which will include:
• A 9.9% increase in the cost of water;
• A 5.5% increase in property rates;
• A 13.07% increase in electricity;
• A 7% increase in refuse removal (solid waste).
After months of back-to-back increases to fuel prices (and many others), the increase to our water and electricity piles further financial pressure on South Africans in the face of growing job cuts and a lacklustre economy.
Thankfully, we can find a silver lining in the upcoming fuel price drop – scheduled to take effect on Wednesday 3 July, which will see petrol drop by a massive 95c and 96c per litre for grades 95 and 93, respectively. Diesel will also come down by around 75c per litre.
Small favours may go a long way.