As guarantor over a significant portion of Eskom’s debt, the prevailing governance problems at the State-owned utility were of “grave concern” and had become an “enormous risk” to government and the entire economy, Finance Minister Malusi Gigaba said on Wednesday.

Delivering his first Medium-Term Budget Policy Statement (MTBPS) address in Parliament, the Minister said failures of governance, leadership and financial management had displaced previous concerns over electricity shortages as a major concern of government.

“Eskom is simply too important to the country to fail, and we will not allow it to. National Treasury will work closely with the Department of Public Enterprises to strengthen governance and financial management at Eskom.”

Gigaba announced that a new Eskom board would be appointed before the end of November. “Working with the new board, we will ensure a credible executive management team is in place.”

Gigaba also reiterated his earlier statement that government and the country could not currently afford to pursue a new nuclear build programme, but stressed that the position could change should the country begin growing again.

He said that Eskom’s surplus was currently above 5 000 MW and that this surplus position would remain for the foreseeable future, owing to the weak performance of the economy.

“At this point in time the Budget cannot afford nuclear and the country cannot afford nuclear. I am only reiterating the statement the President [Jacob Zuma] made on May 31 this year during The Presidency’s Budget Vote, where he also affirmed that we would proceed at a pace and scale that the country can afford.”