Proposed Eskom move irrational and disastrous

Issued by Ghaleb Cachalia MP – DA Shadow Minister of Public Enterprises
10 Jan 2023 in News

Note to editors: Please find attached soundbite by Ghaleb Cachalia MP.

The DA notes the expressed intention of the governing party to move Eskom away from Public Enterprises to the Ministry of Energy.

The DA is implacably against this move and will fight it, tooth and nail, with all the levers at our disposal.

We share the opinion of Professor Anton Eberhard who has warned that it would be a grave mistake to move Eskom to Department of Mineral Resources and Energy (DMRE) or even a separate energy ministry.  According to Eberhard, there is an obvious conflict of interest in an energy ministry being Eskom’s shareholder while also having responsibility for competition and regulation in the sector.

There is a clear and present danger that if this happens, Eskom will never be fully unbundled – as is necessary. Moreover it will retain its dominant market position and the envisaged open power exchange and market will not, in all probability be implemented.

Private investment will be pushed to the back burner and under an enhanced version of the status quo – back to the future, as it were – corruption and loadshedding will flourish again. The move also has potentially significant financial implications which we are busy unraveling.

The only faction set to gain from this move clearly an outcome of a political deal to keep president Ramaphosa in power for another term.

Recently, in the run-up to André de Ruyter’s resignation Mantashe’s destructive influence was on full display, accusing De Ruyter of a raft of unsubstantiated and unconscionable actions. He is on record as saying “Eskom, by not attending to load-shedding, is agitating for the overthrow of the state”. This, on top of earlier statements that De Ruyter was acting “like a policeman” at the corruption-riddled entity.

It would therefore be a grave mistake to move the utility – despite some ostensible rationale from an administrative and operational perspective – into the grubby hands of an ambitious bully who will use the coal lobby (with all its warts) and his allies in the cabal, namely, Mondli Gungubele and Enoch Ngodonwana, to champion the saving of jobs under the guise of the fixing of Eskom’s Energy Availability Factor (EAF).

While it is possible to fix Eskom, what the cabal (to whom Ramaphosa is now indebted) refuses to accept for its own power and other economic incentives is, alongside the need for a stable baseload, it is necessary to explore and accelerate generation from other multiple sources on a source agnostic/lowest cost basis while we explore the most suitable, least invasive, energy-dense solution – let alone opening up the sector to private investment.