Eskom to release interim results today

Eskom will release its interim results today to the expectant public and tense business world as the utility battles to overcome crippling debt incurred by alleged mismanagement and rampant corruption.

Organisation Undoing Tax Abuse (Outa) energy expert Ted Blom was not sure if Eskom had found the R20 billion it needed to prove a measure of liquidity in order to present the critical financial report.

Last week, the Johannesburg Stock Exchange said it would stop trading Eskom bonds if the utility did not supply its interim results.

That could have led to creditors knocking on Eskom’s door, and it might still happen.

“I’m expecting another hole of between R10 and R20 billion on derivatives, which was only partially disclosed by Eskom, and which it mandated Trillion to trade on Eskom’s behalf,” Blom said, adding the debt would have to be closed out sooner or later.

He added that Eskom had also applied to the National Electricity Regulator of South Africa (Nersa) for another price increase of about 30% to meet Eskom’s needs in the short term.

With R350 billion of its debt secured by government guarantees, Blom said there were myriad creditors, with a total of nearly R475 billion owing. South Africa’s debt stood at more than R1.8 trillion yesterday, down from more than R2 trillion thanks mainly to the strengthening of the rand this month.

According to Nersa, Eskom is looking to raise R66.6 billion from the public. Blom said Eskom owed money to French and Dutch development agencies, various overseas funds, the African Development Bank, the World Bank, and that local banks were also at risk of being exposed.

Just some of Eskom’s questionable practices Outa has cited include a “legally dubious” R1.6 billion guarantee by Eskom to Absa Bank, which was allegedly used by the controversial Guptas’ Tegeta companyto buy Optimum Coal Holdings.

Then there was a nearly R660 million “prepayment” from Eskom to Tegeta so it could buy Optimum coal mine.

“When Optimum was owned by Glencore, Eskom fined it R2 billion for inadequate coal quality and insisted that this fine would not be waived for a new owner.

“After the Guptas bought Optimum, this fine was mysteriously reduced to R577 million,” Outa stated.

In July last year, Eskom admitted that Trillian was paid R495 million and McKinsey was paid R900 million.

“In 2016-17, Eskom ran up irregular expenditure of R2.996 billion under Eskom chief financial officer Anoj Singh.

And the auditors said this may not be the real number as Eskom did not have an adequate system for identifying all irregular expenditure.”

– amandaw@citizen.co.za

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