The Auditor General of South Africa (AGSA) has again given Eskom a qualified audit for 2023/24. AGSA is worried about Eskom's finances, and rising municipal debt is a big problem.
AGSA said Eskom can still operate. But this depends on government support. It also depends on Eskom solving its municipal debt crisis.
On Wednesday, AGSA reported that Eskom's audit got worse in 2023/24. Only one area improved, and three areas declined.
Generation and plant operations improved, but AGSA said this improvement was small and did not meet government expectations.
The declines were in distribution, finances, and oversight. These are more concerning.
AGSA said Eskom's financial statements contained errors, there were control problems, laws and regulations were not followed, and not enough was done to punish wrongdoing.
"Not punishing wrongdoing encourages bad behavior," AGSA said. "Promises to fix these issues have not happened. There is a lack of accountability, oversight, and consequences."
AGSA must decide if Eskom can continue operating. Eskom can for now, but various issues could change this.
Eskom lost R57 billion. Its current bills are R50 billion more than its assets. Eskom hopes to make a profit in 2025.
Eskom needs government help for its debt. Electricity price rulings are uncertain. The large municipal debt is a problem.
Eskom also loses money from theft, illegal connections, and fraud. This makes electricity more expensive to produce.
"Eskom's ability to operate depends on improving generation," AGSA said.
Eskom has few options for fixing its finances. It must cut costs and earn more money, both of which are difficult.
Eskom wants to save R10 billion in the next two years. However, AGSA said Eskom lacks proper systems to identify and recover wasted spending.
"The planned savings will not work without compliance and fixing wasteful spending," AGSA said.
Raising prices is another option. But AGSA said this needs policy changes and major actions.
AGSA said Eskom can still operate. But this depends on government support. It also depends on Eskom solving its municipal debt crisis.
On Wednesday, AGSA reported that Eskom's audit got worse in 2023/24. Only one area improved, and three areas declined.
Generation and plant operations improved, but AGSA said this improvement was small and did not meet government expectations.
The declines were in distribution, finances, and oversight. These are more concerning.
AGSA said Eskom's financial statements contained errors, there were control problems, laws and regulations were not followed, and not enough was done to punish wrongdoing.
"Not punishing wrongdoing encourages bad behavior," AGSA said. "Promises to fix these issues have not happened. There is a lack of accountability, oversight, and consequences."
AGSA must decide if Eskom can continue operating. Eskom can for now, but various issues could change this.
Eskom lost R57 billion. Its current bills are R50 billion more than its assets. Eskom hopes to make a profit in 2025.
Eskom needs government help for its debt. Electricity price rulings are uncertain. The large municipal debt is a problem.
Eskom also loses money from theft, illegal connections, and fraud. This makes electricity more expensive to produce.
"Eskom's ability to operate depends on improving generation," AGSA said.
Eskom has few options for fixing its finances. It must cut costs and earn more money, both of which are difficult.
Eskom wants to save R10 billion in the next two years. However, AGSA said Eskom lacks proper systems to identify and recover wasted spending.
"The planned savings will not work without compliance and fixing wasteful spending," AGSA said.
Raising prices is another option. But AGSA said this needs policy changes and major actions.
