Eskom will ‘cease to exist’ if not bailed out
Energy expert Ted Blom says the news that Eskom is technically bankrupt and will not survive beyond April without a bailout does not come as a surprise.
Acting director general of the department of public enterprises Thuto Shomang told MPs on Wednesday that the power utility is technically insolvent and a bailout is the only way to guarantee its survival beyond April.
Blom says Eskom’s dire financial situation was predicted five years ago.
"The government says Eskom will be bankrupt by April, I'm saying that by the financial year end in March they'll be technically bankrupt and that lender will not lend them more money. In fact, there could be a call on Eskom debt and that will be a disaster for the country.”
Blom says Eskom might have to go into business rescue.
ALSO READ:ANC in Gauteng, students, move to solve grievances
"If they don't come up with the hard cash, but the issue is that Eskom is now so big and for it to fail will actually drag down the government ratings with it.”
He says the request for R100 billion from power utility will not be enough to save it since 60% will be used within the next three years.
"If Treasury cannot find adequate money, because Eskom is already projecting a R20 billion loss for this year, and I predict it'll be more than R20 billion it's the same for next year and the year after so Eskom’s projections are that they're going to bur through R60 billion.
"We also can't afford to have those continuous load-shedding which is a symptom of very bad operational management at Eskom."
Blom warns that the country is in for a rough ride over the next couple of years.
LISTEN HERE: