Public Enterprises Minister Lynne Brown has reiterated that critical talks are under way within government to address Eskom’s financial problems, adding that the issue is being addressed “not as an Eskom problem but as a national priority”.

Addressing lawmakers during her Budget Vote in July, Brown stressed that the fifth demo-cratic administration had placed resolving the electricity supply problem at the centre of its agenda.

She added that, in the current difficult economic environment, financing of the build and capacity expansion programmes had become more challenging. “It is clear that a sustainable funding framework that is independent of the fiscus is required.”

“This framework must attract private-sector funding and guarantee a reasonable return on assets on the one hand. On the other, it must allow space for government to leverage the build programme for better developmental outcomes.”

However, it was far from clear whether such an approach would apply to Eskom, which was facing a R225-billion revenue shortfall as a result of having been granted five yearly tariff increases of 8% between 2013 and 2018 by the National Energy Regulator of South Africa instead of the 16% it had requested.

A task team comprising the National Treasury, the Department of Public Enterprises and the Department of Energy had been working with Eskom on solutions for some time and last week received a copy of the utility’s proposed ‘comprehensive sustainability plan’.

The plan contained Eskom’s proposed remedies and it is widely anticipated to include a request for additional support from its shareholder, the South African government.

It is also likely to include the cost-saving business productivity programme, which is already under way, as well as proposals for raising more than the R300-billion in debt initially anticipated to help fund Eskom’s build programme.

In parallel, moves are also under way to claw back prudently incurred expenses through a regulatory process and there is also a possibility that Eskom could seek to reopen the latest tariff determination in a bid to accelerate the transition to “cost-reflective” electricity prices.

Brown gave assurance that ongoing concerns related to the affordability and reliability of electricity supply to residential and business consumers was “being addressed very seriously and very urgently”.

But she also indicated that she was ready to put pressure on the State companies falling under her responsibility, saying: “State-owned companies must simply get the basics right. Those with a direct interface with citizens and businesses must deliver quality, affordable and accessible services consistently.”