Eskom must restructure to remain sustainable: Analysts

Analysts say Eskom must urgently consider restructuring and reducing its overheads in order to remain sustainable. The bad business decisions that Eskom made over the years have contributed to the current crisis that it is facing.

The power utility is battling to keep the lights on due to the coal supply challenges that it is facing. State capture is one of the reasons that contributed to Eskom’s current crisis.

There is also backlog in maintenance of coal powered stations.  The power utility is also battling with high fixed costs, increasing debt and unplanned outages.

Eskom has said that its coal supply problems are linked to Tageta. “The current load shedding is a combination of the coal supply challenges and that is because of bad decision in the last 10 years,” says Chairperson of the South African Power Producers Association, Thomas Garner.

Some analysts have suggested that Eskom must sell Medupi and Kusile power stations to help improve its finances. “Well I don’t know of anybody who has the pockets or the willingness to buy those plants so if I was Eskom I would look at retracting myself,” says Garner.

Many businesses are incurring massive financial losses due load shedding. However, Garner says this is an opportunity for businesses to opt for more viable sources of energy.