No light at the end of the Eskom tunnel

Public Enterprises Minister Lynne Brown has given the Eskom board 48 hours to give her an explanation of its payments to Trillian Capital Partners.

This follows reports that Eskom lied in June, when it said that consulting firm Oliver Wyman found payments of R1.6 billion to Trillian and McKinsey were above board.

Oliver Wyman then forced power giant to admit it has been lying.

Eskom then released a statement after its board meeting, saying the responsible individuals will be charged once the facts have been confirmed. Disciplinary charges against four senior executives are meanwhile continuing.

EE Publishers Managing Director and energy expert Chris Yelland says the statement from the power utility doesn't reveal much.

For me, this absolutely amazing. There have been about 10 investigations and reports over a number of years and it appears they still don't have the facts. It just looks like they are stalling and there's a lack of will to tackle the real problems.

Chris Yelland, Managing Director at EE Publishers

Also read: Eskom admits lying about Trillian and McKinsey payments

One of the earlier press releases yesterday addressed public relations and perception issues, implying that this is a media perception problem.

Chris Yelland, Managing Director at EE Publishers

Yelland goes on to say Eskom suffers from terrible governance.

He says when sales volumes at Eskom go down, as they are, prices go up.

When they sell less of their product, they need to put the price of the product up in order to recover costs, the energy expert says.

The other cost driver is reputation, which affects their credit rating and new debt, Yelland adds.

He says Eskom will have to borrow about R150 billion in the next three to four years, bringing its debt up from R350 billion to about R500 billion.

Sikhonathi Mantshantsha, Deputy Editor at Financial Mail, says interim board chair Zethembe Khoza is utterly useless, adding the parastatal has gone from bad to worse under his leadership.

Lynne Brown needs to explain to South Africans on what basis she appointed each and everyone of them.

Sikhonathi Mantshantsha, 'Financial Mail' Deputy Editor

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This article first appeared on 702 : No light at the end of the Eskom tunnel


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