Renowned economist Dawie Roodt said Eskom’s generation and distribution divisions are slowly dying, similar to South African Airways (SAA) and the South African Post Office (SAPO).
Roodt made these comments during a Firstpathway Partners webinar on how the United States has emerged as a secure sanctuary for many South Africans.
“Only the transmission part will remain, and the rest of Eskom will just slowly die and come to an end,” he said.
Roodt previously explained that Eskom is completely bankrupt. “It has been operationally and financially run into the ground. It does not work anymore,” he said.
Eskom currently owes around R420 billion. The Finance Minister announced that the state will take over between R150 billion and R160 billion of this debt.
He said the reason for the government taking over Eskom’s debt is because it cannot survive financially.
He explained that around 40,000 people work at Eskom with an average salary of R70,000 per month.
“Last year, Eskom employees received a 7% increase. It is irresponsible. These workers are already overpaid,” he said.
Eskom’s collapse also means that it cannot provide enough electricity to keep the lights on, hampering economic growth.
Roodt said the government is trying to run things they cannot run, which causes them to collapse.
He previously explained that SAA had ten turnaround plans, and they all failed. “The company was ultimately run into the ground financially and operationally.”
“The same is currently happening to the South African Post Office. It is simply coming to an end. It is under provisional liquidation, and it is also just dying.”
He does not think the Post Office can be rescued, even with the new turnaround plan, which requires another R10 billion bailout.
“They have had turnaround plans before, which failed. Whatever the new plan is, it will also not work,” Roodt said.
He predicted that Eskom would go the same route as SAA and the SAPO, where it is slowly dying and the private sector taking over its functions.
This article was first published by Daily Investor and is republished with permission.