Gordhan’s department changes its mind about Eskom being insolvent

The department of public enterprises has issued a correction to their earlier assertion that Eskom was insolvent on Wednesday.

The Citizen reported yesterday that the department of public enterprises had, in a document that was part of a presentation, said that Eskom was technically insolvent and would “cease to exist” if it continued on its current trajectory.

The corrected version of the Department of Public Enterprises document changes “technically insolvent” to “facing liquidity challenges” and takes out the part about how the utility will “cease to exist by April”.

The department’s spokesperson, Adrian Lackay, told The Mail & Guardian that Eskom could not be considered insolvent as its liabilities are not greater than its assets.

The original version of the department of public enterprises document saying Eskom was ‘insolvent’.

The corrected version of the department of public document changes “technically insolvent” to “facing liquidity challenges” and takes out the part about how the utility will “cease to exist by April”.

Whether or not the struggling utility is considered insolvent, it is still likely that a government bailout is the only option at this point.

Minister of Public Enterprises Pravin Gordhan, meanwhile, has announced a nine-point plan for bringing Eskom back from the brink of collapse, that energy expert Chris Yelland told The Citizen was “credible”.

He added, however, that Gordhan’s solution would take time and money, both of which are in short supply.

“I have little doubt government will have to come to the table with a bailout because, in the short term, Eskom is going to need more money,” Yelland said.

(Compiled by Daniel Friedman. Additional reporting by Amanda Watson)

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