Pretoria - Public Enterprises Minister Lynne Brown on Wednesday commended Eskom on progress it has made with executing its build programme.
Addressing a Public Enterprises Portfolio Committee meeting, Minister Brown said the success can be attributed to stable leadership, execution of the maintenance plan, delivery of the build programme and financial sustainability.
In the last year, she said the power utility has made great progress with the execution of the build programme, including the delivery of the Medupi and Kusile power stations as well as the Ingula pumped storage scheme.
“Over the last month, we have seen the delivery of two units at Ingula adding 666 MW to the national grid. This is greatly commendable and I am confident that I have the right team at Eskom to execute,” said the Minister.
The company, she said, has also seen great improvement in leadership stability with the board and management having been able to demonstrate sound performance and governance with all the executive roles filled.
Keeping the lights on
Eskom has also seen significant improvement in the execution of maintenance that ensures required maintenance is executed while the lights stay on.
“Load shedding has become a thing of the past and I am very comfortable with the approach taken. The usage of diesel has also reduced significantly, with the monthly budget reduced from almost R1 billion per month to R40 million per month.
“The Group Chief Executive Officer Brian Molefe has assured me that there is no prognosis for load shedding over the winter months,” said Minister Brown.
Improvement in Eskom finances
There has been an improvement in the company’s financial position, particularly liquidity, despite the unfavourable decisions from the National Energy Regulator of SA (Nersa).
“The company has worked diligently with my department to ensure compliance with equity conditions set by the Minister of Finance to ensure financial improvement and compliance,” said Minister Brown.
Over the next year, Eskom will focus on the delivery of the additional units, achieving cost cutting measures, strengthening the transmission grid to support the Independent Power Producer programme and electrification expansion.
“This turnaround approach can be replicated at all the other state owned companies (SOCs), even outside of the Department of Public Enterprises, as a dashboard for operational performance and sustainability,” said Minister.
The Minister told the portfolio committee that the global economy has been facing serious head winds that have posed challenges to most emerging market economies, including South Africa.
“This has made the implementation of our policies and programmes more challenging. In 2016, the economy is expected to grow below 1%. Our focus is to ensure that we turn the growth story around and position our SOCs to drive economic recovery and set the economy on the growth trajectory with better developmental outcomes.”
The department’s position, she said, is to ensure that it leverages its SOCs to drive the industrialisation programme, accelerate transformation of the economy and support Africa’s development.
Denel
Minister Brown said there is stability in SOCs, with Denel’s incoming board of directors having reviewed their strategy.
“The focus of the Board in the medium term will be on improving cash management focused on improving working capital management and opening new markets through strategic partnerships in identified markets.”
In addition, the cash situation at the SOC has stabilised and the R850-million note brought to the market in quarter four of 2015/16 by the company was over-subscribed, showing market confidence in the interventions at the company.
Progress at other SOCs
The Minister told the committee that Alexkor is continuing to show pleasing progress in its recovery and operations.
The Board of Safcol, meanwhile, has reviewed its strategy and it is placing greater emphasis on beneficiation without compromising saw log security of supply to SMME sawmills.
“The SOC has developed plans to upgrade the Timbadola sawmill in Limpopo and the re-establishment of a Sabie sawmill complex. This will have a positive impact on the SOC’s plans to stimulate the furniture manufacturing and timber-framed building industries in these rural regions of our country.”
In the wake of slow and declined economic growth, Transnet continues to drive a countercyclical investment strategy.
“The company is rephrasing its investment plan to a longer-term plan in order to better align capacity creation to expected demand. Transnet is also shifting its focus towards capturing greater market share in the domestic market and extending its footprint in the wider African market,” the Minister said.
Meanwhile, SA Express is working towards achieving financial sustainability amidst a very difficult operating environment in the aviation sector as well as a generally weak global economic environment. – SAnews.gov.za
