Eskom says if it is not granted tariff increases it wants from March this year, its finances might collapse, triggering a national crisis, as both the State’s credit ratings and consumers’ well-being would suffer. The power utility – which is battling to keep the lights on due to aging power stations, among other factors – is also sitting on a R450-billion mountain of debt, causing to struggle containing runaway diesel and debt servicing costs. Representing Eskom at the High Court in Pretoria, where the power utility has applied for interim relief – asking the court to grant it 16.6% tariff increase for the current year and 16.7% increase for 2020/21 – Advocate Matthew Chaskalson said if the parastatal doesn’t get these increases, its finances will collapse. He said because R318-billion of Eskom’s current debt is guaranteed by the State, if the utility defaults because tariffs don’t cover its costs, those guarantees will immediately become payable by the State. And if the State cannot pay it, it could trigger an immediate liability for the State’s R980-billion debt too.
