Home Economy Eskom’s debt grows at rate of R1bn a month, company is ‘technically...

Eskom’s debt grows at rate of R1bn a month, company is ‘technically insolvent’

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Acting DG of the department of public enterprises Thuto Shomang said Eskom’s financial problems has been a serious threat to the South African economy as the power utility consumes enormous amounts of money each month.

For the time being, the company has a large debt which currently stands at R435 billion — 15% of the republican sovereign debt. According to Shomang’s statement made on Wednesday, the numbers increase by R1 billion a month after several internal issues, including poor management and poor grid engineering.

In addition, Eskom has been hiring workers and specialists during the last decade, which, in turn, extends overhead and associated costs.

“The number of employees increased from 32 000 in 2007 to 48 000 in 2018 with associated costs growing from R9.5 billion to R29.5 billion over the period,” Shomang said, adding that the company is ‘technically insolvent’.

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