Eskom commended for progress in its build programme

APRIL 6, 2016

Public Enterprises Minister Lynne Brown on Wednesday commended Eskom on progress it has made with executing its build programme.

Addressing a Public Enterprises Portfolio Committee meeting, Minister Brown said the success can be attributed to stable leadership, execution of the maintenance plan, delivery of the build programme and financial sustainability.

In the last year, she said the power utility has made great progress with the execution of the build programme, including the delivery of the Medupi and Kusile power stations as well as the Ingula pumped storage scheme.

“Over the last month, we have seen the delivery of two units at Ingula adding 666 MW to the national grid. This is greatly commendable and I am confident that I have the right team at Eskom to execute,” said the Minister.

The company, she said, has also seen great improvement in leadership stability with the board and management having been able to demonstrate sound performance and governance with all the executive roles filled.

Keeping the lights on

Eskom has also seen significant improvement in the execution of maintenance that ensures required maintenance is executed while the lights stay on.

“Load shedding has become a thing of the past and I am very comfortable with the approach taken. The usage of diesel has also reduced significantly, with the monthly budget reduced from almost R1 billion per month to R40 million per month. 

“The Group Chief Executive Officer Brian Molefe has assured me that there is no prognosis for load shedding over the winter months,” said Minister Brown.

Improvement in Eskom finances

There has been an improvement in the company’s financial position, particularly liquidity, despite the unfavourable decisions from the National Energy Regulator of SA (Nersa).

“The company has worked diligently with my department to ensure compliance with equity conditions set by the Minister of Finance to ensure financial improvement and compliance,” said Minister Brown.

Over the next year, Eskom will focus on the delivery of the additional units, achieving cost cutting measures, strengthening the transmission grid to support the Independent Power Producer programme and electrification expansion.

“This turnaround approach can be replicated at all the other state owned companies (SOCs), even outside of the Department of Public Enterprises, as a dashboard for operational performance and sustainability,” said Minister.

The Minister told the portfolio committee that the global economy has been facing serious head winds that have posed challenges to most emerging market economies, including South Africa.

“This has made the implementation of our policies and programmes more challenging. In 2016, the economy is expected to grow below 1%. Our focus is to ensure that we turn the growth story around and position our SOCs to drive economic recovery and set the economy on the growth trajectory with better developmental outcomes.”

The department’s position, she said, is to ensure that it leverages its SOCs to drive the industrialisation programme, accelerate transformation of the economy and support Africa’s development.