New Eskom transmission department must not be burdened with old problems

Issued by Ghaleb Cachalia MP – DA Shadow Minister of Public Enterprises
19 Aug 2020 in News

The Democratic Alliance (DA) will interrogate measures announced by Eskom to separate the State-owned enterprise (SOE) into three entities in an effort to curb load shedding and address various other problems at the power utility at today’s Parliamentary Portfolio Committee meeting to review the performance of SOEs.

With Stage 2 load shedding again creating havoc and causing frustration, Eskom is reportedly shuffling the positions of 12 senior staff members in its power generation division.

This is reminiscent of re-arranging the deck chairs on the Titanic. What the utility needs at its helm is deep operational and financial experience in the generation sector which accounts for 85% of Eskom’s business.

We have also heard reports that Eskom is also hoping that its new transmission department will share its current IT and support systems, thereby circumventing the need to develop new, more robust systems that will address the problems of the past.

While there is an urgent need for separation, it must be done in the correct way. The Eskom CEO, André de Ruyter, is quoted as saying developing new a new IT system would not only delay the separation but would be very expensive. In the past the CEO has assured Parliament that the separation would not cost anything, now his tune has changed.

Current efforts might ameliorate some of the management issues (procurement, corruption, defects, coal procurement, etc) but it will not fix the core problem.

Economic growth in South Africa is dependent on a stable power supply and unless a stable baseload is re-established, load shedding will continue to hamper economic growth.

The truth is that South Africa’s economy does not have the luxury to use the next decade to migrate out of energy intensive industries and dispense with load shedding that way. Eskom should adapt to the growing economy, and not the other way around.

Eskom needs teams with solid backgrounds in finance, design, project management, construction, commissioning and testing, operations and maintenance, to focus on fixing the SOE’s legion of problems while the power utility simultaneously pursues privatisation options. Independent power producers (IPP) should also be allowed to generate and supply electricity to businesses, municipalities and provinces.

The current measures announced by the CEO do not provide the required confidence in these crucial areas.

South Africans need to know how the Eskom’s handling of the separation will impact service delivery. The country is still knee-deep in the midst of the Covid-19 pandemic and struggling to deal with the economic devastation of the lockdown. We cannot afford for any delays in Eskom’s separation or to foot the bill, especially when we’ve been told that we would not have to pay in the first place.

We need competence, not cadres.

Click here to read more about the DA’s plan to drive the cost of electricity down, introduce competition into the energy sector, and diversify the country’s energy sources to introduce more renewables, as well as our record of action on the electricity crisis over the last 8 years.