Covid-19 crisis hits Eskom in the pocket

Eskom and Transnet's ability to collect revenue would be severely hampered by the economic fallout of the coronavirus health crisis, Deputy Minister of Public Enterprises, Phumulo Masualle said on Wednesday

Masualle told the portfolio committee of public enterprises that the struggling power utility was weakened further by the shut down of the economy, which had seen companies close, and households and municipalities lose the ability to pay for power.

"The closing down of economic activity meant that the new challenge for Eskom would be the inability to raise revenue," he said.

Masualle said there was some consolation in the fact that Eskom had been able to use the lockdown, which started on 27 March, to perform more plant maintenance, meaning it would have greater capacity when the economy was reopened.

"I'm sure that we will have much better levels of energy availability going forward," he said.

Masualle said the crisis would impact all state-owned enterprises, and the government's efforts to turn these into viable, self-reliant enterprises, adding that Transnet was also of particular concern.

He said port closures and trade restrictions meant less cargo had been coming into the country, and that Transnet's fortunes would now depend on how the reopening of the economy was handled.

"The recovery is going to be one of those things I am looking at because it is not going to be at much speed, it is going to depend on how the opening up of the economy is going to proceed."

Masualle said the revised budget finance minister Tito Mboweni was expected to table in the near future would shed more light on how the department's strategy for state owned enterprises would proceed.

The existing blueprint and budget allocations were finalised last year and therefore did not factor in the impact of the global health crisis.