Eskom Holdings SOC Ltd. admitted that it was struggling for ways to plug an income hole of ZAR191 billion equivalent to US$19.1 billion. Eskom was a South African power utility company. It obtained half the price upsurge needed for the first five years through 2018.
On February 28, Nersa, South Africa's National Energy Regulator permitted Eskom to increase electricity prices. An average of 8% was added in every year of the next five years. This created ZAR225 billion cash-flow deficit.
The company expected to absorb the deficit this financial year and the next. However, it was still outlining it plans for the ZAR191 billion required for the period after that. The information came from Finance Director Paul O'Flaherty who told reporters in Johannesburg.
"We will have to re-engineer Eskom to respond to the tariff increase," Brian Dames, Eskom Chief Executive Officer, told the media. "We can't just make up by saving a bit of money here and there. It will require a fundamental rethink about what we do."
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