Gordhan criticises Eskom’s ‘elongated’ restructuring timelines, wants grid company trading from Nov

20th September 2023 By: Terence Creamer - Creamer Media Editor

Gordhan criticises Eskom’s ‘elongated’ restructuring timelines, wants grid company trading from Nov

Public Enterprises Minister Pravin Gordhan
Photo by: Creamer Media

Public Enterprises Minister Pravin Gordhan has criticised Eskom’s “elongated” restructuring timeframes and has called for greater urgency and drive from the utility in completing the remaining processes required to enable the independent grid company to begin trading.

Eskom has indicated that the National Transmission Company South Africa (NTCSA), the first of three subsidiaries under the yet-to-be-formed Eskom Holdings scheduled to be operationalised, will begin trading from the start of its new financial year on April 1.

The State-owned utility provided the updated timeframe to Engineering News after the Energy Regulator confirmed that it had approved the transfer of the remaining two licences from Eskom to NTCSA, which was regarded as a key milestone for ensuring its full operationalisation.

However, in a presentation to the Select Committee on Public Enterprises, the Department of Public Enterprises (DPE) indicated that government believed there was potential to expedite the process and for the NTCSA to begin trading on November 1 instead.

The restructuring was severely lagging the initial December 2021 deadline set for the legal separation of Eskom’s generation, transmission and distribution divisions.

“When we have reviewed the progress in recent times, we have brought to the attention of the board of Eskom that we believe that the timelines of the internal teams of Eskom are far too elongated.

“They seem to lack urgency and the necessary drive to complete as many processes as possible during this administration,” Gordhan told the committee during a virtual meeting.

He also stated that government was no longer referring to the restructuring under way at Eskom as “unbundling”, owing to the term’s association with sale or privatisation processes, stressing that all three subsidiaries would remain State owned.

DPE’s Donald Nkadimeng confirmed that a series of actions and approvals were still required before the NTCSA could begin trading, including:

Despite the extensive nature of outstanding conditions, Nkadimeng indicated November 1 as being the department’s “aspirational” timeline for the NTCSA to begin trading.

He also indicated that the DPE wanted the entire restructuring process to be completed by the end of March, including the operationalisation of the National Electricity Distribution Company of South Africa, which would also require licensing by Nersa, the separation of the Generation Division, and the establishment of a new holdings company, or Newco.

The departmental timelines, Nkadimeng confirmed, were not in line with Eskom’s internal timelines, but reflected the DPE’s view that the process could be expedited.

“Eskom provided their timelines, and we have since indicated to them that there is a need for them to review their timelines,” he said.