Independent energy consultant Andrew Kenny has warned that Eskom will continue to be a financial drain for government because of its rising operating costs.
The power utility owes its creditors over R400 billion and does not generate enough cash to pay even the interest on its debt.
President Cyril Ramaphosa appointed a team of advisors and has announced that Eskom is to be split into three subsidiaries namely – generation, transmission and distribution.
Some experts have warned that this could lead to increased efficiencies, especially if competition is allowed.
Kenny says what can help rescue Eskom is having to increase electricity tariffs which aren’t too high by world standards.
He says: “Prices have gone up a lot lately but they are not high by world standards. What can also help is to cut down Eskom’s costs and again there’s political interference here. It’s massively over-staffed. It’s got twice as many people working for it as it needs, all earning huge salaries.”
