Cape Town - To add fuel to the Eskom fire, while immediate interventions were supposed to be implemented to alleviate the worsening bout of load shedding, Eskom and the national treasury have found themselves in dispute over how money should be raised to fund diesel supply for the power utility.
In December, Eskom announced that it had run out of money to buy diesel and had already overspent its diesel budget.
The dispute was first reported by News24 after the Public Investment Corporation (PIC) decided to roll over R13 billion of Eskom’s debt when it becomes due on January 25, leading to expectations that Eskom would now have money available to buy diesel.
However, Eskom relayed that it did not have spare money and the PIC roll-over was already included in its plans.
Speaking to the Cape Argus, Eskom said the transaction of the PIC rollout was in the process of being executed and both the equity from national treasury and the roll-over of Eskom’s redeemable debt with the PIC formed part of Eskom’s annual borrowing programme for the financial year ending March 31, 2023.
“Accordingly, neither source represents additional liquidity with which to purchase diesel,” the power utility said.
Eskom said if more funding for new diesel was not supplied by national treasury, it would have less cash available to fund the purchase of diesel and accordingly would operate its open cycle gas turbines less frequently.
This back and forth has sparked harsh criticism from political analysts as the state of the country’s economy continues to deteriorate.
Political economy analyst Daniel Silke said: “This ‘throwing the ball’ at each other is an unedifying process which continues to show how confused the state of management is at Eskom and also that the relationship between Eskom and its major shareholder, government, remains equally confused and troublesome.
“One would expect the issue of money should not be a factor here since the cost to the country of blackouts is absolutely enormous and has the potential to permanently damage our economy.
“Every effort should be made to find the necessary cash to provide the necessary emergency back-ups. If emergency back-ups need to be applied then maybe an energy emergency should be declared to free up funds for this particular process,” Silke said.
Silke said there should be no excuse from Eskom or the treasury given the urgent and dire state that the country was in as a result of load shedding.
Director at the School of Public Leadership at the Stellenbosch University, Professor Zwelinzima Ndevu added: “There is an expectation that national treasury should assist Eskom in ensuring that it delivers on its mandate.
“There is also an expectation that Eskom budgetary process is a responsible and responsive approach which guarantees availability of resources for provision of uninterrupted services.”
CPUT media studies lecturer and analyst, Dr Trust Matsilele, said it was without doubt that the Treasury had a duty to fund critical and strategic state-owned enterprises like Eskom.
“It is inconceivable and not practical for an enterprise like Eskom which has been bleeding money each financial year to buy diesel to keep lights on. This is a political crisis which is finding expression in the malfunctioning of a critical institution like Eskom, and because this is a political crisis, it is incumbent on the finance minister who is the head of the national treasury to find solution in the immediate to keep lights on and industry busy,” Matsilele said.
Ghaleb Cachalia, DA spokesperson on public enterprises, said: “Nothing of particular significance at Eskom appears to be flexible in the short-term. The only solution on the table is to be plugged by diesel purchases and the problem with this is that Eskom has no money, the roll-over of the PIC load notwithstanding.
“The problem additionally is that Eskom and government appear to be talking past each other, they need to come to terms and do a simple calculation as to what is the most appropriate measure to keep the lights on… No matter which way you look at it, customers are going to have to pay for it, customers who are already stretched to the very limit.”