/ 22 April 2019

Mboweni admits Ramos among those considered to head Eskom unbundling

Finance Minister Tito Mboweni.
Finance Minister Tito Mboweni. (David Harrison/M&G)

Although Finance Minister Tito Mboweni denied in a tweet he posted on Monday that Maria Ramos has been appointed to lead the process of unbundling Eskom, he did, however, admit to the SABC that she is among those being considered for the position.

In January this year, Absa group announced that Ramos would retire as its CEO after being at the helm of the bank for 10 years. Before her time at Absa, Ramos was Transnet’s group CEO.

According to Mboweni, there has been no appointment made for the position of chief reorganisation officer (CRO) at Eskom yet, although “processes are under way”.

Among other things, the CRO would be responsible for overseeing Eskom’s finances, plant maintenance, and operational costs, as well as various strategic functions.

In February this year President Cyril Ramaphosa told the National Assembly in his State of the Nation Address that there is no “single solution” to fix debt-laden Eskom.

Ramaphosa said at the time a combination of interventions is called for, such as a change to its structure, financial support from government and a turnaround plan from Eskom’s management, in order to bring stability to the state-owned power utility.

Eskom is saddled with R419-billion of debt and isn’t selling enough power to cover its interest payments and operating costs. It has been plagued by years of mismanagement and cost overruns on new plants, among other things.

Mboweni was forced to write to Parliament earlier this month that he would invoke Section 16 of the Public Finance Management Act in order to secure funds for Eskom.

This would authorise R17.6-billion from the National Revenue Fund to be transferred to Eskom before the end of April.

The department of Public enterprises is confident that Eskom will receive the necessary funds from the China Development Bank (CDB) by month’s end.

This was after a CDB loan failed to materialise in March, nearly plunging the cash-strapped power utility further into a liquidity crisis.

The CDB was meant to release some R7-billion from a $2.5-billion facility, which was concluded in July 2018. However, the CDB funds did not materialise due to “its central bank exchange control requirements”, a treasury report signed by Mboweni to Parliament said.

The Democratic Alliance slammed Eskom, saying it is a “black hole” and “no longer viable” following news of the emergency R17.6-billion bailout.

“Eskom and other state-owned enterprises have become a black hole that the South African taxpayer needs to constantly fill,” said the party’s spokesperson on public enterprises, Natasha Mazzone, on Sunday. — Fin24