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Gordhan: No, Eskom is not on the brink of collapse

23 April 2019 9:09 AM
Tags:
Eskom
bailout
R5 billion

Minister of Public enterprises Pravin Gordhan and Treasury D-G Dondo Mogajane discuss solutions to fix the power utility.

After a loan deal with the China Development Bank failed, Treasury has had to give a R5 billion bailout to Eskom.

Read: Could IPPs solve the load shedding problem? Analyst disagrees

Treasury director-general Dondo Mogajane joins Bongani Bingwa to discuss the bailout.

As part of Eskom's financial strategy, they had a loan from the China Development Bank that was due in March and that did not come through, as a result, we had to make the R5 billion through an emergency fund available, as an advance from the R23 billion.

Dondo Mogajane, Director-general - Treasury

Mogojane reiterates that the failure of the Chinese deal does not mean the bank has developed cold feet.

We had to send a team to China to explain the current situation around Eskom, to explain the unbundling that the president was talking about during his state of the nation.

Dondo Mogajane, Director-general - Treasury

He says Treasury needed to explain to China, the points coming out of the 2019 budget.

I think as a result of that, the Chinese had to put their financing plan differently, that is why the money is only coming in April.

Dondo Mogajane, Director-general - Treasury

The damage to the power utility over the last few years has been severe and will take a long time to fix, he acknowledges.

Business must come to the party. I am making the call to business; they also need to come around and help to fix the enterprise.

Dondo Mogajane, Director-general - Treasury

We all know what is happening in the suburbs and townships. People are not paying for electricity and are bypassing the system.

Dondo Mogajane, Director-general - Treasury

Public enterprises minister Pravin Gordhan tells Bongani Bingwa that this cash injection is not an admission that the utility is collapsing.

No, Eskom is not on the brink of collapse, we have several state-owned entities that are finding themselves in extreme financial difficulty as a result of state capture and everyone is aware of that.

Pravin Gordhan, Public enterprises minister

The damage that has been caused by these institutions is vast, and it involves financial and operational issues.

Pravin Gordhan, Public enterprises minister

The minister says the government has the problem under control and is aware of changes that need to happen.

While the utility is not at the brink of collapse, it is in difficulty as a result of state capture, he concludes.

Listen below to the full interview:


23 April 2019 9:09 AM
Tags:
Eskom
bailout
R5 billion

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