Eskom board chair Mteto Nyati has warned that transferring the utility’s transmission assets to a new national Transmission System Operator (TSO) would "come at a price" and risks triggering default or cross‑default clauses in Eskom’s loan agreements.
Debt, asset value and timing
Speaking on Radio 702, Nyati said Eskom’s debt stands at just under R350 billion and is secured against its transmission assets. He put the utility’s valuation of those assets at about R110 billion, and said transferring them without lender consent could activate contractual default provisions.
"We feel that as a country, at this time, to be spending R110 billion, compared to the many other things that are required, we don't necessarily think it's the right thing to be doing at this time," Nyati said.
Nyati stressed that the utility supports a reformed electricity market with greater competition and participation, but argued the question is one of timing. He said a TSO could be established and allowed to operate while the physical transfer of assets is delayed until financial concerns are resolved.
Government process and Eskom’s position
The Eskom chair welcomed President Cyril Ramaphosa’s statement that the second phase of electricity reforms must focus on Eskom’s concerns. Nyati said resolving the finance-related issues raised by Eskom should precede any immediate asset transfer.
He suggested that it would be preferable to create the institutional architecture of a TSO and permit it to perform its functions, and only transfer ownership of assets when an appropriate financial solution had been found.
Union reaction and labour concerns
The National Union of Mineworkers (NUM) separately rejected plans for an independent TSO, saying it could put jobs and Eskom itself at risk. NUM’s national energy coordinator, Khangela Baloyi, told Radio 702 the union requires guarantees that workers will not lose jobs or suffer degraded employment conditions as a result of the reforms.
The NUM’s stance adds a labour‑market dimension to the debate already centred on fiscal and contractual risks.
Immediate implications
Key immediate points raised by Eskom and the NUM are:
- Contract risk: Transferring transmission assets without lender consent could trigger default or cross‑default clauses due to Eskom’s secured debt.
- Fiscal cost: Eskom values transmission assets at roughly R110 billion, a sum the utility says the country may not be in a position to spend now.
- Labour protection: The NUM insists on explicit job guarantees before an independent TSO is created.
| Item | Figure |
|---|---|
| Eskom debt (approx.) | R350 billion |
| Transmission assets valuation (Eskom) | R110 billion |
Nyati said the TSO end state should include assets under its control, but that establishing the operator first, and addressing financing matters, is preferable to an immediate transfer. He reiterated Eskom’s support for market reform in principle, but emphasised caution on execution.
What remains unclear
Several details remain to be clarified publicly. These include whether and how the government will secure lender consent, the timing and mechanics of any asset transfer, and the precise guarantees on labour conditions the government might offer to satisfy union demands. The source material notes President Ramaphosa’s indication that the second phase will focus on Eskom’s concerns, but does not specify the measures to be taken.
As the electricity reform process continues, the interplay between contractual finance obligations, the price of assets, and labour guarantees will be central to whether transmission ownership shifts and how quickly a TSO can be operationalised without imperilling Eskom’s balance sheet.
