This is a detailed and in-depth Eskom 2019 timeline, starting from Jan.
The power utility starts distribution of 400MW power to Zimbabwe.
During a no-deal roadshow in London, the power utility tells investors it wants the government to absorb the majority of its R440bn debt.
Zimbabwe and Eskom reach a deal in terms of the 400MW of power it requires. Distribution is set to start sometime this week.
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.
Government is setting aside an additional R59bn for Eskom. But under strict conditions according to Minister of Finance, Tito Mboweni.
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.
Eskom confirms that Zimbabwe has paid R139m. However, negotiations are still on the table regarding the power demand from Zimbabwe.
Eskom emphasizes that municipal debt to the company continues to grow. One of the big problem areas, Soweto, owes Eskom an estimated R18m.
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.
A new Head of Generation, Bheki Nxumalo, is assigned. He is currently the acting CEO for Eskom Rotek Industries.
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.
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.
Treasury states that increasing the funding for Eskom is unavoidable. As it stands, Eskom is already R500bn in debt.
Eskom May 2019
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.
Eskom admits there are no proper plans or budgets in place for decommissioning old coal power plants.
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.
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.
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 makes a media-statement, stating that no more electrical surprises should be expected. Plans are in place to keep the electricity demand stable.
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.
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
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.
Eskom announces that load-shedding will temporarily end. But it warns the grid is still under pressure and vulnerable.
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.
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.
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.
CEO of Business Leadership, Bonang Mohale, makes a media statement in which he says R3bn is lost every day due to rolling blackouts.
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.
Finance minister, Tito Mboweni, reveals that R69bn will be given to Eskom during his budget speech, establishing the government bailout.
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.
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.
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.
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.
Eskom manages to secure a loan from local and international banks worth R15bn.
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.
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.
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.
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.
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.
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.
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.
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.
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.