Eskom has raised R76.1-million from the sale of two buildings as parts of a strategy to free up cash through the disposal on non-core assets, and more properties are expected to be sold.
The buildings in Kimberley and Johannesburg were sold to the Department of Human Settlements, Water and Sanitation and will be converted into housing blocks, the power utility announced on Tuesday.
Eskom, which is saddled with nearly half a trillion rand in debt, boasts an extensive portfolio of properties plans to raise more than R2-billion from the sale of non-core property.
“The property disposal process is in line with Eskom’s unbundling process and its bid to raise capital.”
The two high rise office buildings are the Trust Centre in Kimberley and a 26- storey block in Braamfontein which was used a regional offices for Eskom.
“Eskom continues to explore similar opportunities in other areas where it owns non-core property stock. It is expected that sales of Die Wilge Flats outside the Kusile Power Station at eMalahleni and the Lephalale Stands near the Medupi Power Station will be finalised during the first half of the current financial year,” the power utility said.
In February in emerged that cost for the Wilge Flats, which have been described as a white elephant had shot up to R840-million. The flats were meant to house contractors and artisans working at Kusile power station in 336 flats.
But six years after the contract for its development was awarded at an initial cost of R260-million in December of 2013, it is standing empty and incomplete. Construction costs for the housing development were meant to amount to about R770 000 per flat. But by the time construction was halted in December 2019, costs had shot up to R2.5-million per unit, Fin24 reported.
Total costs rose to R840-million and declared by Eskom as fruitless and wasteful expenditure.
CEO André de Ruyter described the overruns as “deplorable” and indicated that the company was considering handling over the block of flats to the Witbank community.
In the meantime, Eskom is currently conducting maintenance to its power plants and its new mega power stations, Medupi and Kusile were hit by design defects that require additional funding to fix.