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BusinessLive reports that Treasury director-general Dondo Mogajane warned in Parliament on Wednesday that Eskom could run out of money as of end-March 2020 if it failed to raise necessary finance and this implied more funding from the government.
He said this would be in addition to the R59bn already provided for by government and stressed the need to cut employee costs, including the salaries of top Eskom executives. Eskom’s funding requirement for 2019/2020 is R46bn of which 58% has already been secured. But the utility is experiencing challenges raising the required funding due to lenders’ concerns about its future sustainability, uncertainty about the government’s restructuring plan and a lack of clarity on the policy direction of the energy sector. Mogajane stated that obligations had to be imposed on Eskom to reduce costs. It could not simply rely on government funding. These obligations would have to include reducing labour costs, which left a lot to be desired and had to be addressed “head on”. The cost of employees — including top executives — was too high, he said. If the number of employees were to be retained, then salaries must be cut. He also said the recently appointed head of the chief restructuring office of Eskom, Freeman Nomvalo, was developing a financial turnaround which will be vital in the development of a sustainable turnaround strategy.
- Read the full original of the above report by Linda Ensor at BusinessLive
- Read too, Treasury’s Dondo Mogajane outlines conditions for Eskom bailout, at BusinessLive
Get other news reports at the SA Labour News home page