By Lehlohonolo Lehana.
Eskom has announced that load shedding will be eased further this week, moving down to stage 3 during the day.
Load shedding will continue at stage 4 on Tuesday (14 march).
From Wednesday (15 March) stage 3 load shedding will take place between 05h00 and 16h00, moving up to stage 4 in the evenings. This rotation will continue until further notice, it said.
The reduction in load shedding is due to a recovery in generating capacity.
“Over the past 48 hours, the repairs to the damaged towers from Cahora Bassa in Mozambique were completed and restored to full capacity. We have successfully returned to service a generating unit each at Arnot, Grootvlei, Kriel, and Tutuka power stations.
During the same period a generating unit each at Lethabo, and two units at Kriel power stations were taken offline for repairs.
The return to service of a generating unit each at Hendrina and Medupi power stations are delayed.
Breakdowns are currently reduced to 13,949MW of generating capacity while 4,322MW of generating capacity is out of service for planned maintenance.
Meanwhile Duncan Pieterse, the head of asset and liability management at the National Treasury, says that extensive “recapitalisation initiatives” for state-owned companies through loan guarantees from the government are becoming an ever-growing fiscal risk.
Despite making up 55% of recapitalisation funding at R331.2 billion between 2014 and 2023, Eskom is part of a sum of companies owned by the state that are in dire financial straits and need more money from the government to keep going.
During a presentation to the standing committee on public accounts this Tuesday (14 March), Pieterse said that over the last decade, there had been a significant decline in the performance of major state-owned companies as operational costs have increased, net profits have fallen, and debt levels have become increasingly unsustainable.
He said that state-owned companies have been facing inadequate financial policies and a lack of adequate oversight and accountability since 2012.
“Customers have also complained about increasingly poor levels of service delivery. Compensation costs, in general, have far outpaced the growth of these businesses and have become a key factor in declining net profit or losses.
“The multiple bailouts of Eskom, South African Airways, South African Broadcast Corporation, the Post Office and others have become a fiscal burden. And the high debt levels have increased fiscal risk to unacceptable levels and crowded out important social and other expenditure.”
Billions have been routinely spent on businesses – that are being run into the ground – last another year through guarantee loans.
Governments may make guarantee loans, in terms of the Consitution, to public institutions – only if the guarantee complies with the conditions of the legislation.
The guarantee is essentially an obligation to cover the beneficiaries in their financial obligations, such as repayment or interest payments. These guarantees were initially issued to allow public entities to borrow on the strength of their balance sheets and be used in exceptional cases.
Exceptional cases are, however, becoming more common, and the frequency and value of guarantees in South Africa have remained high.
According to the National Treasury, governments’ exposure to contingent liabilities emanating from public entities is expected to reach R396.1 billion this year.
The fiscal authority added that the state and quality of the exposure to risk have decreased.
Prior to this year, Eskom has received billions of recapitalisation, and it has not slowed down.
Due to the company’s financial position, a special appropriation bill was urgently tabled late last year that allocated a further R230 billion in support.
The government has provided: R158.6 billion, R56 billion, R31.7 billion and R21.9 billion for 2019/20, 2020/21, 2021/22 and 2022/23, respectively.