'Get ready for tax levy to save Eskom, because the money is simply not there'

pixabay.com, 2019

Also, read:

Strap yourself in for a reconstruction bond or a reconstruction tax levy, because the money is simply not there.

Dr Adrian Saville, CEO - Cannon Asset Managers

Eskom implemented load shedding on Thursday for the fifth day in a row as the state-owned utility struggled to keep its generators going.

It may not feel like it, but load shedding is the least of our worries.

Even if Eskom manages to keep the lights on; the mountain of debt it accumulated in the past decade threatens to destroy the South African economy.

In 2008 Eskom had R40 billion in debt and sold more electricity than it does today, despite having far fewer employees and expenses.

Today, Eskom owes R419 billion and earns an income that doesn’t even cover the interest on its debt.

Eskom borrowed R300 billion (and counting) to build Kusile and Medupi, two enormous and deeply flawed coal-fired power stations.

Do President Cyril Ramaphosa’s plans have any hope of saving Eskom and the country?

The Money Show’s Bruce Whitfield interviewed Dr Adrian Saville, CEO of Cannon Asset Managers and Professor at Gordon Institute of Business Science (Gibs).

Listen to the interview in the audio below (and scroll down for more quotes from it).

This is about stitching and patching what for all intents and purposes is a very grand risk to the country.

Dr Adrian Saville, CEO - Cannon Asset Managers

Eskom is troubled… operationally… financially… it is also technologically out of pace… Almost all of our energy is coal-based… We are a decade off technologically...

Dr Adrian Saville, CEO - Cannon Asset Managers

…Invariably two things happen with grand-scale infrastructure spend. The first is the number goes up and the second is the date goes out…

Dr Adrian Saville, CEO - Cannon Asset Managers

Both of these very, very big projects spends – which was supposed to deal with the next decade of energy certainty – both of them are delivering at 50% of their designs.

Dr Adrian Saville, CEO - Cannon Asset Managers

To cut spending in an election year is almost unthinkable. I’m intrigued as to where they’re going to find the funding… it’s not important; it’s absolutely critical!

Dr Adrian Saville, CEO - Cannon Asset Managers

If something is going to galvanise a nation… The last time we had something like this was the World Cup…

Dr Adrian Saville, CEO - Cannon Asset Managers

South Africa has been given the benefit of doubt [by rating agency Moody’s] for an extremely long time… A downgrade is going to make Eskom’s problem even bigger… Eskom would be looking for funding at higher rates… It really is worrying.

Dr Adrian Saville, CEO - Cannon Asset Managers

Get the 10 most-read articles of the week from Bruce Whitfield’s The Money Show, emailed to you every Friday morning:

Subscribe to our Business Wrap Newsletter


Recommended

by NEWSROOM AI
Read More
Eskom paid R300 billion (and counting) for 2 deeply flawed coal-fired dinosaurs

Eskom paid R300 billion (and counting) for 2 deeply flawed coal-fired dinosaurs

Litigation will follow, says Minister Gordhan. Business Day’s Carol Paton on his inquiry into the failing Medupi and Kusile.

5 strategies for keeping calm when Eskom sheds a load (by Prof Renata Schoeman)

5 strategies for keeping calm when Eskom sheds a load (by Prof Renata Schoeman)

Psychiatrist Renata Schoeman has tips and tricks to help you cope without blowing a fuse.

Cheekily named load shedding app EskomSePush goes from 2500 to 400 000 users

Cheekily named load shedding app EskomSePush goes from 2500 to 400 000 users

It’s now the most downloaded IOS app and 2nd most downloaded Android app in SA. Bruce Whitfield interviews co-founder Dan Wells.

Food prices are about to start climbing thanks to Eskom

Food prices are about to start climbing thanks to Eskom

Nicol Jansen from Agri SA warns of rising food price inflation if the crisis continues for much longer.

Eskom load shedding is smashing businesses and any hope of a jobs recovery in SA

Eskom load shedding is smashing businesses and any hope of a jobs recovery in SA

Bruce Whitfield speaks to Tanya Cohen (Busa), Philippa Rodseth (Manufacturing Circle) and Henk Langenhoven (Minerals Council SA).

How privatisation of Eskom can stop its apocalyptic effect on the economy

How privatisation of Eskom can stop its apocalyptic effect on the economy

Privatisation can unlock Eskom’s potential to operate like highly successful utilities globally, according to Neeraj Sanjay Mense.

Popular articles
Mbube copywright: 'A lump sum of royalties would be paid to Linda family'

Mbube copywright: 'A lump sum of royalties would be paid to Linda family'

Spoor & Fisher consultant professor Owen Dean explains the outcome of the copyright infringement case against Disney.

Ndlovu Youth Choir 'Waka Waka' performance wows America’s Got Talent judges

Ndlovu Youth Choir 'Waka Waka' performance wows America’s Got Talent judges

Choir director Ralf Schmitt says the ensemble is honoured to represent South Africa and going to next round of the competition.

You made a huge mistake downloading FaceApp if your privacy is important to you

You made a huge mistake downloading FaceApp if your privacy is important to you

Washington Post technology columnist Geoffrey A. Fowler did a forensic analysis of the Russia-based app. Check it out.

How to buy a new car even if you don’t really have enough money for it

How to buy a new car even if you don’t really have enough money for it

South Africans are increasingly buying cars they can’t afford using balloon payments, says consumer journalist Wendy Knowler.

[2018] Jesse Clegg (son of Johnny) opens up about money and growing up on tour

[2018] Jesse Clegg (son of Johnny) opens up about money and growing up on tour

[From the archives] Jesse Clegg talks about his famous father and attitude to money (hopes and fears, successes and failures...).

Investigators find serious corruption at EOH

Investigators find serious corruption at EOH

A probe found "suspicious transactions" worth R1.2bn, bribery and theft. Bruce Whitfield interviews EOH CEO Stephen Van Coller.

'I should have told the Sunday Times the pot smoking was irrelevant'

'I should have told the Sunday Times the pot smoking was irrelevant'

Investigative journalist Jacques Pauw says he's sorry for any harm caused in his article on Mkhwebane and her principal witness.

I decided to make this Rihanna song with my maskandi vision - Mbuzeni Mkhize

I decided to make this Rihanna song with my maskandi vision - Mbuzeni Mkhize

After South African star Mbuzeni Mkhize performed a remix of Rihanna's track 'Diamonds' she contacted him to collaborate with her.