Eskom has been identified as the country’s single largest threat to economic sustainability and the economic recovery plan which has been agreed upon at the National Development and Labour Council (Nedlac) that now sits before Cabinet.
The social partners at Nedlac have backed a number of key economic reforms which include the restructuring of State-Owned Enterprises like Eskom.
This is an effort to ensure the power utility is able to provide an affordable and reliable supply of energy.
Nedlac is of the view that it could take up to three years to restore the local economy to pre-COVID levels. This after taking a beating during the hard lockdown which has moved the economy from a recession to a depression.
According to data released by Statistics South Africa, second-quarter GDP fell by 51% on an annual basis.
Eskom power supply constraints under the spotlight:
And to remedy the situation, the social compact at Nedlac proposed restructuring the power utility to ensure it’s fit for purpose.
The social compact is also of the view that Eskom must be well capitalised to ensure that it’s fit to serve. This as concerns over the power utility’s debt levels mount, according to Chair of the steering committee of Business for SA Martin Kingston, Eskom’s debt sits at over R200 billion.
In the past, Eskom’s relied on government bail outs to stay afloat.
Kingston warns that failure to resolve Eskom’s challenges could limit the country’s ability to attract investment.
Eskom anticipates that load shedding will continue until December: