These are the questions about Eskom that need to be answered

Business

These are the questions about Eskom that need to be answered

The bailout isn't nearly enough to save the utility, so what else is the government planning to do?

Bheki Mfeka

The finance minister’s R59bn bailout of Eskom is a positive step – on condition that the unbundling model addresses the systemic and systematic challenges at Eskom and is driven by competent leadership.

By systemic challenges I mean those located within Eskom. Systematic challenges are those that are outside, structural and market-related. It is clear even to a layperson that R59bn is not enough to deal with Eskom’s debt-servicing costs, undertake the completion of the investment programmes, deal with the escalating costs of coal above the price sanctioned by the National Energy Regulator of SA (Nersa) and plug the gaps arising from corruption.

Other structural challenges are located outside Eskom itself, such as its relationship with municipalities, the role and costs of independent power producers, recovery of the stolen billions, bureaucratic red tape arising from the relationship with the shareholder representative, policymaking and the treasury. Simply creating separate corporate entities will not assist, and may add layers to the governance problems...

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