Nyati Admits Eskom Service Problems as Markets Fall and Airlines Face Fuel Shock
A series of developments across South Africa’s energy, aviation, and property sectors unfolded on Wednesday against a backdrop of weaker financial markets and rising global fuel costs.
Eskom chairperson Mteto Nyati acknowledged that the power utility’s service delivery has fallen short and requires urgent improvement. “I agree, you know. We suck. Our service is terrible. It’s terrible… but we have changed… we need time..”
His remarks came shortly after a Johannesburg High Court ruling overturned Eskom’s refusal to grant Sibanye-Stillwater permission to proceed with a solar project.
At the same time, higher oil prices linked to tensions in the Middle East are beginning to affect local industries. FlySafair confirmed it will introduce a temporary fuel surcharge as jet fuel prices surge.
In the retail property sector, Hosken Consolidated Investments completed the sale of the Kalahari Mall in Upington for R800 million, one of the more notable commercial property transactions in recent months.
Financial markets reflected the uncertain global environment. The JSE ended the day lower, dragged down by resource stocks, while the rand weakened against major currencies.
Markets Slide as Resource Stocks Weigh on the JSE
South Africa’s stock market closed lower on the day, with broad-based declines across key sectors.
The FTSE/JSE All Share Index fell 2,208 points, or 1.85%, to end at 117,399. During the session, the index traded between a low of 115,747 and a high of 119,159.
Among the major indices, the Resource 10 index declined 3.75%. Industrial shares also came under pressure, with the Industrial 25 index falling 1.09%, while the broader All Share Industrials index slipped 1.07%.
The Top 40 Tradeable Index ended the session 1.99% lower, while the SA Property Index declined by 1.24%.
A few counters moved against the broader trend. Karooooo climbed 5.01% to R774.99, OUTsurance rose 4.87% to R72.19, and Sasol gained 4.63% to finish at R162.45.
Financial shares showed more resilience. PSG Financial Services advanced 2.31% to close at R26.61, while Grindrod added 2.2% to end the day at R17.65.
Rand Weakens as Commodity Markets Shift
The rand weakened against major global currencies during the day’s trading session.
Commodity markets showed mixed movements. Gold slipped 0.32% to $5,190 per ounce, while platinum held steady at $2,195.64.
Brent crude traded slightly lower at $91 barrel, down almost 0.31%, although oil prices remain elevated following geopolitical tensions in the Middle East.
Eskom Chair Acknowledges Service Delivery Problems
Eskom chairperson Mteto Nyati conceded that the utility needs to improve the way it serves customers, particularly in its electricity distribution operations.
Speaking at the BizNews Conference in Hermanus, Nyati said Eskom’s distribution division remains one of the company’s biggest challenges even as load shedding has largely eased.
He said improving service delivery will require a shift in how the organisation operates, especially as South Africa’s electricity sector opens to greater competition from private generators.
Nyati’s comments came after developers raised concerns about long delays in the installation of substations required to connect new property developments to the grid.
Court Ruling Puts Eskom’s Solar Decision Under Scrutiny
The pressure on Eskom intensified following a Johannesburg High Court judgment involving mining company Sibanye-Stillwater.
The court ruled that Eskom acted unlawfully when it refused to grant permission for a solar project despite earlier approval from the utility’s own technical teams.
According to the judgment, the decision was overturned by Eskom’s Ad Hoc Distribution Executive Committee, which the court found acted with commercial considerations in mind.
The ruling declared Eskom’s refusal invalid and highlighted how internal decision-making processes can delay renewable energy developments.
Eskom has indicated that it will review the judgment and consult legal advisers before deciding on its next course of action.
FlySafair Introduces Temporary Fuel Surcharge
Airline passengers may soon feel the impact of rising global fuel prices.
Fuel prices at South African coastal airports have increased by nearly 70% since the escalating conflict in the Middle East, placing additional pressure on airline operating costs.
Fuel accounts for roughly half of an airline’s direct operating expenses. FlySafair estimates the latest increase adds about R35,000 to the cost of each flight.
The airline said the surcharge will remain in place only while fuel prices remain elevated.
Kalahari Mall Sold in R800 Million Property Deal
The deal was concluded through HCI’s subsidiary, Kalahari Village Mall Proprietary Limited, which held the investment in the shopping centre.
Funds from the sale will be used to settle taxes, reduce debt, and distribute proceeds to shareholders. HCI holds a 64.78% stake in the subsidiary that owns the mall.
Kalahari Mall is a major retail hub in the Northern Cape and attracts close to 300,000 visitors each month.
Tenants include Woolworths, Checkers, Truworths, Edgars, Clicks, Jet, Pep, Ackermans, Foschini, Spur, Game, and Wimpy.
Upington, situated on the edge of the Kalahari Desert, is known for its intense summer heat, where temperatures often climb above 40°C.
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