Deputy Minister, Mr Ben Martins
Chairperson of the Board of Eskom, Mr Mpho Makwana
Eskom CEO, Mr Brian Dames
Members of the media
Ladies and gentlemen
The security of electricity supply has become a key area of focus in the past few years, not only for government, but for the country as a whole. The electricity challenges we faced in 2008 brought to the fore just how serious and urgent the situation was.
Eskom’s massive build programme, which commenced in 2004, seeks to address these challenges, and to provide a catalyst for us to achieve our growth and development objectives as a country. This investment is massive – it is the largest this country has ever seen, and once complete, will ensure that we are on a firmer footing to place this country’s growth and employment levels on a higher trajectory.
As the Department of Public Enterprises, we have noted the interim results which Eskom presented to us recently. The company is beginning to turn around, to become more profitable, and we are encouraged by that. As well as reporting positive results, the organisation’s corporate governance is stable, with the board, as well as the chairperson, CEO and CFO all being in place.
Part of our role as the shareholder department is to ensure that these entities which are in state hands are financially-viable and self-sustaining, thus reducing their reliance on the fiscus. In addition, state-owned enterprises are a key lever for us to advance the agenda of the developmental state.
As government we will therefore continue to support Eskom as it undertakes this crucial task. In addition to the new guarantees amounting to R174 billion, which were recently announced by the Minister of Finance in his Medium-Term Policy Statement, government has in recent years provided a R60 billion loan to Eskom, as well as R176 billion in guarantees, to ensure that we can assist Eskom to keep the lights on.
In keeping to our commitment to ensure security of electricity supply, as the department we support the proposed R20 billion equity injection into Eskom, the details of which will be further outlined in the Ministers Committee on the Budget (MinComBud) and consequently be tabled by the Minister of Finance in the budget in February 2011.
This financial support allows all the projects and contracts which have been committed to, to proceed as planned. This means that Medupi Power Station is fully funded, and will be commissioned by the end of 2012. The contracts for the construction of Kusile are being placed, with the first unit to be commissioned by 2014.
The conclusion of the process to renegotiate the Special Pricing Agreements is expected by the end of this financial year, and is a positive move aimed at freeing the company from these onerous contracts, particularly at this juncture in their capital expenditure programme.
We are fully aware of the challenges that still remain in the electricity sector, and we would, therefore, urge the company not to become complacent. There is still a lot of hard work that still lies ahead, which means that we are not out of the woods yet.
As government, we will continue to work with Eskom, and other relevant stakeholders, to ensure that the Build Programme is completed on time, and that there is security of electricity supply, and that Eskom remains a key lever for our growth and development aspirations as a country
Thank you.
Source: Department of Public Enterprises
