During his opening address at the Financial Times Africa Summit in London earlier in the week, President Ramaphosa declared that the government would soon give a deliberation on how the ailing power utility’s (Eskom) debt would be dealt with. As such, Public Enterprises Minister Pravin Gordhan spearheaded the drafting of a special policy paper, mapping out the debt-ridden power utility’s future. This is yet to be released.
Eskom is in a crisis and has in fact been for a few years now, continuing to struggle with liquidity problems as well as operational challenges. Its debt position has been getting worse, with its current debt marking over R450 billion, while it is struggling to make enough money even to service its debt. In large part, this is due to the fact that the municipalities do not pay their outstanding debt to Eskom ‒ this culture dates back to the Apartheid years of the culture of non-payment for government services.
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