South Africa: Eskom Unbundling on Track and to Cost R500 Million

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  • The Select Committee on Public Enterprises and Communication heard from Eskom’s Chief Executive Officer (CEO), Mr Andre de Ruyter this past Wednesday who confirmed that there will be no forced retrenchments as a result of the restructuring process.
  • The process is on track and will cost R500 million. 
  • The power utility will be separated into three divisions, namely; transmission, generation and distribution.
  • Functional separation of the entities is complete with boards in place, legal separation now in process. 
  • Legal separation of transmission is expected to be completed by December 2021 while generation and transmission legal separation is expected to be completed in December 2022.  

Eskom’s Chief Financial Officer (CFO), Mr Calib Cassim, told the committee that the highest estimated cost of the process is R500 million and 42% of that is allocated to information technology and it includes system changes, system configuration, transferring of data and the establishment of new entities.

Eskom’s CEO Andre De Ruyter says the functional separation of the three entities has already been completed while the legal separation will be concluded by the end of next year.

De Ruyter says the exercise has been a challenging one. “It is indeed an ambitious ask particularly in terms of timelines. The typical timelines for restructuring of this magnitude and private sector is a number of years and without indulging in any self-praise I would venture to suggest that so far Eskom is moving very expeditiously in concluding the restructuring process along with timelines required by the roadmap. So we are on schedule. We have highlighted some of that looks particularly in terms of concluding the necessary legislative amendments and we look forward to being addressed inter-alia by the intergovernmental steering committee.”

Asked whether this unbundling will result in job losses, De Ruyter assures Eskom workers that there will be no forced retrenchments as a result of the restructuring process. He adds that the conditions of service will not be affected by their being transferred to the new divisions.

“Their terms and conditions of service will not be impacted and in fact, their payslip at the end of every month should still say Eskom. So we don’t anticipate that there will be a change even though they may be moved from Eskom Holdings as their employer to for example to Eskom Generation Pty Ltd as their employer but the conditions and terms of service will not be affected,” he said.

Author: Bryan Groenendaal


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