Business Case Studies & Business Publications

Eskom and The South African Electrificat...

Werhane, Patricia ...

Case

Eskom and The South African Electrification Program (C)

Werhane, Patricia H.; Gorman, Michael E.; Cunningham, Brian

E-0164 | Published April 7, 1999 | 2 pages Case

Collection: Darden School of Business

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Committed to spending approximately $400 million annually to provide 1.75 million South African households with electricity by 2000, Eskom had to forfeit an additional $300 million because of consumers' nonpayment for service. The company also faced rising operational costs as a result of consumers' illegally tampering with their electrical connections. These costs had increased to such an extent that annual costs were higher than annual sales in many of the areas Eskom served. This illegal behavior had evolved under an oppressive regime that forced many consumers to steal from the existing infrastructure in order to access basic services.