Mining

Eskom to target procurement in cost drive preferring to avoid ‘forced retrenchments’

ESKOM would renegotiate supply contracts in order to reduce costs rather than cutting jobs through forced retrenchments, said Fin24, citing the power utility’s CEO, Andre de Ruyter.

“The president [Cyril Ramaphosa] has been very clear that there will be no forced retrenchments at Eskom, and that mandate is very clear and we will obviously respect that,” De Ruyter told Fin24.

Voluntary severance packages would be considered, but De Ruyter was cautious to guard against losing scare skills. “So you’ve got to be very careful and selective how we go about that … My preference would not be to be confrontational, I want to build partnerships,” he said.

The key saving would be through the renegotiation of contracts and the use of diesel. He did not specifically refer to coal supply contracts, but the South African government previously asked South African coal producers to consider lowering the price at which they sold coal to the utility.

“The biggest opportunity that we’ve got is on the procurement side, where we are paying a lot of money for goods and services that we procure, and if we renegotiate those contracts, I think we will be able to deliver some very substantial savings,” De Ruyter said.

“In addition, if you look at what we spend on diesel because of a lack of reliability of our generating assets. Restoring those assets to a state where they can predictably and reliably supply the electricity needs of SA will put us in a place where we can back out of R6bn of diesel purchases a year.”

This was a “huge opportunity” to reduce costs without a negative social impact, he said.

The post Eskom to target procurement in cost drive preferring to avoid ‘forced retrenchments’ appeared first on Miningmx.

Source: miningmx.com

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