Answer to Question #89453 in Microeconomics for Neesha Kanhi

Question

With regard to coal shortages and municipal debts, what forms of interventions do you think Eskom can put in place in order to cover up for all the debts and continue operating? Incorporate relevant graphs in your answer.

Answer 1

Eskom's South Africa's electricity supply company faces many challenges such as coal shortages and Debts. To solve coal's problems, the company's coal procurement department should bring various professional who understands mine and quality of coal produced to produce enough energy that serves the nation. The company should also bring extra coal as a relief measure and relying on diesel to keep the system operational. Debt is another big challenge that hinders Eskom from achieving its goals. To solve the problem, Eskom should schedule power cuts to force the municipality's pay-back the debts they owe them. It will help the company fix financial issues that affect them while establishing better services to the public. The company should also review the cost of selling power. Eskom has been selling the power below the production cost and it is the best time to raise electricity bills to balance the production cost and the output.