The decision by ratings agency Standard and Poor’s to downgrade Eskom’s corporate credit from BB to BB+ is a vote of no confidence in Eskom and its leadership, specifically and in the relatively weak corporate governance of state-owned entities in South Africa, the Democratic Alliance said on Saturday.
“This will only serve to place further pressure on the fiscus due to the R350 billion in government guarantees that has been extended to Eskom,” DA spokeswoman Natasha Mazzone said.
“This is sadly proof that Eskom has a severe lack of leadership both at board level and through the main Eskom stakeholder, the government, which is represented by Public Enterprises Minister Lynne Brown.”
Conditions at Eskom had been going from bad to worse despite repeated claims by the current board, soon to be ex-CEO Brian Molefe, and Brown that all was well at the entity.
This state-owned entity was of crucial importance to the well-being of the South African economy. If Eskom was not run efficiently it had the potential to bring the country to its knees, as happened during the load shedding period.
This downgrade was dreaded but virtually inevitable due to conditions at Eskom. It was more obvious than ever that urgent intervention in the leadership of Eskom was required and that Eskom was in no position to contemplate the mammoth multi-trillion rand nuclear project, Mazzone said.
South Africa Today – South Africa News
