Eskom 2019 Timeline – A Downward Spiral

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Categories: News

This is a detailed and in-depth Eskom 2019 timeline, starting from Jan.

9th August:

The power utility starts distribution of 400MW power to Zimbabwe.

7th August:

During a no-deal roadshow in London, the power utility tells investors it wants the government to absorb the majority of its R440bn debt.

6th August:

Zimbabwe and Eskom reach a deal in terms of the 400MW of power it requires. Distribution is set to start sometime this week.

Eskom July

30th July:

Eskom posts a loss of R20.7b. It also states more than a thousand investigations are complete based procurement breaches within the company. This has seen several employees dismissed from the utility, while several senior employees still face investigations.

23rd July:

Government is setting aside an additional R59bn for Eskom. But under strict conditions according to Minister of Finance, Tito Mboweni.

12th July:

It comes to light that pollution reduction equipment at Eskom’s biggest production plant does not function properly since early last year. The company is also reaching out to specialists in the country. It seeks advice on how to effectively spend the money it received from the government.

2nd July:

Eskom confirms that Zimbabwe has paid R139m. However, negotiations are still on the table regarding the power demand from Zimbabwe.

Eskom June

24th June:

Eskom emphasizes that municipal debt to the company continues to grow. One of the big problem areas, Soweto, owes Eskom an estimated R18m.

23rd June:

Eskom is under pressure to finalize the construction of the Majuba rail line by the end of the year. The alternative is to renegotiate loan terms with the World Bank.

19th June:

A new Head of Generation, Bheki Nxumalo, is assigned. He is currently the acting CEO for Eskom Rotek Industries.

18th June:

The Pretoria High Court decides that payments made from Eskom to Trillian (Gupta-linked Company) were unlawful. It also ordered the Trillian advisory company to pay back the R595m it has received.

10th June:

Zimbabwe gets more desperate for support from Eskom. Distribution to this country has been halted due to non-payments. It is estimated that Zimbabwe owes Eskom $33m. And while talks about a payment-plan are established, Zimbabwe aims to increase the demand to 400MW per day.

9th June:

Treasury states that increasing the funding for Eskom is unavoidable. As it stands, Eskom is already R500bn in debt.

Eskom May 2019

24th May:

Phakamani Hadebe, CEO of Eskom, officially resigns from his position. He states the job is too demanding and causes health issues on a personal level. hence the reason for stepping down.

21st May:

Eskom admits there are no proper plans or budgets in place for decommissioning old coal power plants.

20th May:

Minister of finance, Tito Mboweni, makes a point that Eskom should focus more on collecting from municipalities. He goes on to say municipalities that fail to pay their Eskom debt only contribute to the challenge for sustaining the power utility.

12th May:

Headlines surface that Zimbabwe is looking to Eskom for help in order to prevent load-shedding. Eskom is already supplying Zimbabwe with electricity, but the failing country will be asking for an increased supply.

6th May:

The class-action suit brewing against Eskom escalates. It is reported that more than 400 organizations want to claim damages from the power utility due to load-shedding, in spite of Eskom stating it cannot be held liable.

Eskom April

17th April:

Eskom makes a media-statement, stating that no more electrical surprises should be expected. Plans are in place to keep the electricity demand stable.

11th April:

After three weeks without load-shedding, Eskom warns the grid is unstable and under pressure. It warns that Stage 1 load-shedding can be implemented.

2nd April:

Government supplies Eskom with R5bn to cover some of its debt, given the loan Eskom made from a Chinese bank has not cleared yet.

Eskom March 2019

29th March:

Eskom identifies no less than 30 companies that did not provide quality work on several plants. In addition, Eskom insists these companies pay them back for the poor workmanship.

23rd March:

Eskom announces that load-shedding will temporarily end. But it warns the grid is still under pressure and vulnerable.

19th March:

Jan Oberholzer, Eskom COO, goes on record saying that the power utility only has itself to blame for the lack of maintenance. This is based on a lapsed contract, which was in place for early detection of maintenance failures. In addition, Eskom and the government are preparing for stage 5 and 6 load-shedding in order to avoid a national blackout. In response, Minister Pravin Gordhan states it will take a year or two to stabilize the situation. To make matters worse, the police crime intelligence unit is investigating whether the blackouts might be caused by sabotage through Eskom employees.

7th March:

Nersa has approved 9.41% tariff hikes for the first financial year, while 8.1% and 5.2% will be implemented over the following two years.

4th March:

Executive management at Eskom realizes that several employees illegally connected certain Soweto households to the grid. Minister Pravin Gordhan also appoints a special Eskom Technical Review Team, consisting of 11 industry specialists. On the same day, it comes to light that Eskom did not follow the right procedures when acquiring an R28bn loan from a Chinese company.

1st March:

CEO of Business Leadership, Bonang Mohale, makes a media statement in which he says R3bn is lost every day due to rolling blackouts.

February

26th February:

State inquiry hears how Eskom signed a multi-billion rand contract for coal in less than 48-hours. The Tegeta coal contract is also directly connected to the Gupta family. It is also considered one reason for load-shedding in December.

20th February:

Finance minister, Tito Mboweni, reveals that R69bn will be given to Eskom during his budget speech, establishing the government bailout.

10th February:

Warns of Stage 4 load-shedding implementation for the first time after the December blackouts. This comes after several generators broke down at the same time. The additional risk of Stage 8 load-shedding could be implemented if necessary.

8th February:

Numsa warns Pres. Ramaphosa that it will take action, seeing as they are not happy with the unbundling announcement. According to Numsa spokesperson, they consider it the first step towards privatization and disadvantaging the working class. On the same day, Eskom CEO states that the best way to handle the debt crisis to let government absorb part of the R420bn.

7th February:

Pres. Ramaphosa announces at the SONA that the state-owned power utility is going to be unbundled. More specifically, the power utility will be divided into three different entities – generation, transmission, and distribution.

4th February:

Chief Financial Officer at Eskom, Calib Cassim, tells Nersa that even with the suggested 15% tariff hikes, the company will operate at a loss. And the loss will continue for several years.

2nd February:

Eskom manages to secure a loan from local and international banks worth R15bn.

Eskom January

30th January:

Reports come in that employees at the power utility plan to strike during election week. The strike is said to stand against the plan for cutting jobs and selling shares at the utility provider.

28th January:

The financial strain at the power utility increases with poorly constructed coal-powered mines that have not received necessary repairs. These include the Medupi and Kusile plants. Given that construction is taking much longer and several defects have been discovered at the plants, the costs have doubled to keep the plants running. Eskom blames the contractors and the overall lack of supervision. At the same time, the power utility wants to recoup the costs of repairs from the same contractors.

23rd January:

Pres. Ramaphosa makes a statement that the government is going to come up with measures to stabilize the state-owned provider, but it will take several weeks.

21st January:

It comes to light that South Africa wants to double the energy currently being purchased from the Inga 3 dam (DRC). A letter of interest to increase the purchase from Minister of Energy, Jeff Radebe, to the Congo government confirms this statement.

14th January:

Nersa (National Energy Regulator of SA) starts nationwide and public hearings in response to the tariff hikes asked by Eskom. The power utility pleaded for a 15% increase during October 2018 in order to start covering its R420bn debt. The aim of the hearings will be to decide how much the utility provider can realistically up the tariff over the next three years. On the same day, CEO Phakamani Hadebe acknowledges how the challenges of load-shedding could have been avoided.

10th January:

The second member of the special task team selected by Pres. Ramaphosa steps down, namely Sy Gourrah. Her reasons are based on a conflict of interest. The same reasons were used by the first team member and former CEO, Brian Dames. This leaves 6 members of what should have been 8.

4th January:

In order to save money, a new strategy for cutting executive positions within the power utility is announced. In 2016, a World Bank Study concluded that Eskom is 66% overstaffed. Additionally, the study emphasized the power utility pays workers more than double when compared to 35 other countries on the continent.

3rd January:

Eskom announces the coal shortage is being controlled. In addition, maintenance has been done at key power stations. But the company also warns the grid is sensitive and load-shedding cannot be ruled out.

1st January:

Eskom enters the new year with threats of continued load-shedding and great uncertainty about the future of the company. Some of the reasons that add to the threat include high-demand, a lack of maintenance, and the consequences of state capture. The latter is also presumed to be responsible for the coal shortage the power utility currently faces.

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