SONA2019: Eskom set to undergo massive overhaul: From 1 to 3 entities

SONA2019: Eskom set to undergo massive overhaul: From 1 to 3 entities

- Cyril Ramaphosa announced plans to radically revamp Eskom, including separating the power utility into three separate entities

- Each entity will be responsible for a different aspect of energy provision

- This comes after Ramaphosa appointed a task team in January to examine the failing SOE

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During his State of the Nation Address, Cyril Ramaphosa announced sweeping plans to overhaul Eskom.

These will include dividing the power utility into three entities -  Generation, Transmission and Distribution.

The president added that it was essential that this be done as soon as possible, saying that Eskom is "in crisis".

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Ramaphosa went on to say that the move to separate Eskom into three is intended to restore credibility to the failing SOE and help turn it around.

This comes after years of corruption and mismanagement allegations against Eskom, along with spiraling debt, electricity price hikes and recurring load shedding in many regions. In the 2017/2018 financial year alone, Eskom recorded a loss of R4.6 billion.

Additionally, Ramaphosa said that dividing Eskom would ensure that each entity could focus on only one responsibility and thus isolate costs.

He asserted that this would make it easier for the entities to raise funds and engage with the market.

This is the latest in Ramaphosa's plans to clean up Eskom. Last month, he appointed a task team to investigate the power utility and address its infrastructure problems.

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Along with the announcement, Ramaphosa also said that South Africa's energy security was essential for the country to thrive. He said that by neglecting energy security, Eskom posed a major risk to the country as a whole. 

"It could severely damage our economic and social development ambitions," he said.

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Source: Briefly.co.za

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