The ANC should not play politics and support the DA’s plan to fix Eskom crisis

Issued by Natasha Mazzone MP – DA Shadow Minister of Public Enterprises
23 Jan 2019 in News

The DA has noted the reported recommendations from the task team established to find a way to fix Eskom. This panel is now doing work that is long overdue when the entity is now on the brink of collapse. This is why it is essential that the ANC government must not play politics with the future of Eskom, and adopt the DA’s plan to break up the monopoly in order to find a sustainable and long-term solution to this crisis.

The DA has led the charge on ways to fix Eskom over the last year, with the development of the ISMO Bill which seeks to break Eskom into separate entities, namely into a generation and transmission entity. Unlike the task team’s recommendations, our offer would see some of the generation entity privatized in an effort to break Eskom’s monopoly, allowing private entities to compete on an equal footing. It will also allow well-functioning metros to apply to enter into agreements with electricity generators directly, giving them scope to choose who supplies them with electricity and reduce the risk of load shedding.

There is broad agreement that Eskom is the single most important state-owned entity (SOE) in South Africa, but there is also agreement that its parlous financial state is the single biggest threat to South Africa. The ANC government has allowed Eskom to slide to the brink of collapse through State Capture, over-staffing, poor leadership, mismanagement, corruption and nepotism.

The DA has considered the recommendations of the task team, notably the proposal to restructure Eskom by breaking it up into three separate public entities, namely generation, transmission and distribution. We have also taken note of their other proposals, notably a massive bailout and a substantial increase in electricity tariffs. Both are alarming and cause for concern.

Eskom is already unable to service its R419 billion debt burden, all of which is underwritten by the government, and is facing the prospect of this debt rising to R600 billion over the next few years. The proposal to have government take-over R100 billion of this debt is unacceptable and would amount to the biggest bailout of any SOE in our country’s history. Now is the time for tax payers to say they have had enough.

Meanwhile, South Africans are bracing themselves for increased electricity tariffs with NERSA conducting public hearings. Eskom has called for a 15% increase in electricity tariffs, asking ordinary South Africans to once again foot the bill for the ANC government’s incompetent management of our power utility. Now is the time to be vigilant and for electricity consumers, who have had to suffer through power outages and rising electricity costs, to say they have had enough.

We have done extensive work on this ISMO bill which will restructure Eskom into a more competitive and nimble generation entity that can deal with its debt burden more effectively. It will provide a revamped energy sector and it will break Eskom’s monopoly stranglehold.

We call on the ANC to support our ISMO bill and to join us in finding a workable solution for the Eskom crisis. The panel’s recommendations do not go far enough in solving this crisis. The only way to fix Eskom is to adopt the DA’s bill.

We also call on South Africans to recognise that the DA has workable solutions to a range of problems and ask them to entrust us with their vote as we build One South Africa for All.