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Media Statement 03 November 2023
Leadership instability and poor management at Eskom caused the power utility to report a whopping loss of R23 billion
The National Union of Mine Workers (NUM) has noted with disdain the poor financial performance of Eskom as released on the 31st of October 2023.
The company has reported very poor results with the Energy Availability Factor (EAF) of 56.03% compared to the 2022 EAF of 62.02%. The EAF of a power plant is the amount of time that it can produce electricity over a certain period, divided by the amount of time in the period. The EAF therefore affect most of the performance indicators like load shedding and revenue. Most of the indicators such as Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), operating profit, net profit and other financial ratios were affected by the decline of the EAF. Therefore, the key to resolving the finances of Eskom is to resolve the EAF.
The NUM is not surprised that the company has made a loss of 23 billion rands. This is due to mostly the poor management that failed to increase the EAF over the 2022/2023 financial year. The leadership instability is also not assisting the situation. With 280 days of load-shedding reported over the period 2022/2023 FY, Eskom has massively contributed to the poor performance of the economy which left many of our people without jobs and livelihood. We have witnessed companies closing due to electricity problems. Loadshedding is also affecting small businesses, resulting in citizens losing their livelihoods.
Eskom has once again received a qualified audit opinion due to the incompleteness and accuracy of the PFMA information disclosed, which is a repeat event and was not addressed. The Eskom management team seems incapable of addressing this area of concern. What worries us as the NUM is that we do not see any accountability processes undertaken to redress the situation.
The NUM is on record outlining the problems of Eskom which are the price of primary energy, municipal debt, the excessive use of the Open Circle Gas Turbines (OCTGs), the cost of the Renewable Energy Independent Power Producers (REIPPP), servicing of the debts and dropping sales. Most of these cost items can be turned around if the shareholder has political will.
The NUM is calling on policymakers to stop the disintegration of Eskom into three or more entities. This strategy is not going to resolve the problems that are faced by Eskom, but it will perpetuate the poor performance of Eskom resulting in it being handed over to the private players. We are calling on all South Africans to join us in the call to save Eskom from the greedy neoliberal capitalists, who are waiting to scavenge on the carcass of Eskom after they facilitated and engineered its death.
With regard to the budget speech delivered yesterday by the Finance Minister, the NUM noted a neoliberal reformist approach to the economic issues.
The Minister has displayed a posture which is more dependent on the private sector to solve societal problems. The NUM is not totally against the private sector’s involvement however government can not outsource its primary responsibility to provide basic services such as transport, electricity, and water to the private sector.
South Africa has an unemployment rate of above 40% where less than 10 million out of a population of 62 million are employed and more than 17 million depend on grants. This situation is a ticking time bomb. The state needs to be actively involved in resolving social and economic problems. The NUM has been calling for an economically actively involved developmental state. We need a government that supports the state-owned companies which in turn will create opportunities for the unemployed youth. The economic and fiscal policies that have been implemented by the treasury for decades have not worked. It failed to reduce unemployment, poverty, and inequality.
The plan to reduce the size of the civil servants will compromise the service delivery. We need more nurses, police, teachers, social workers, doctors, and municipal workers to provide the services required by our people. We call on the government to stabilise the State-Owned Companies
For more detailed information, please contact:
Khangela (SOCs) by deploying capable South Africans to lead these companies. We have noted that almost most of the SOCs are falling apart.
Baloyi, NUM Energy Sector Coordinator, 072 450 6251
The National Union of Mineworkers7 Rissik Street.Cnr Frederick JohannesburgTel: 011 377 2111 Cell: 083 809 3257Twitter: @Num_Media
Its birth was facilitated by comrades Cyril Ramaphosa who rose to be its first General Secretary, James Motlatsi who turned to be its first President, and Elijah Barayi who became its Vice President and later the President of Cosatu in 1985 when the federation was formed. porn