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Resignation of Eskom chair extends reign of chaos
SOUTH AFRICA
ESKOM chair Jabu Mabuza resigned on Janu- ary 10, blaming the company’s failure to prevent loadshedding last week.
Thee power cuts meant Eskom’s manage- ment had broken their pre-Christmas promise to South African President Cyril Ramaphosa that there would be no loadshedding until Jan- uary 13.
However, a series of power cuts last week, when South Africa was still on holiday and power demand from industry was lower, meant that Eskom was unable to deliver on its Decem- ber 11 promise.
Mabuza tendered his resignation to Public Enterprises Minister Pravin Gordhan, who has responsibility for Eskom and has been heav- ily criticised for the company’s failure both in December and now in January.
Boardroom chaos at Eskom and last week’s power cuts could spark a political power struggle between Gordhan and Mineral Resources and Energy Minister Gwede Mantashe, who is ANC party chairman and has close relations with the powerful trade unions.
ANC treasurer-general Paul Mashatile called this week for responsibility for Eskom to be moved from Gordhan’s Public Enterprises Department to Mantashe’s Energy Department.
Mantashe’s ANC position means that he is sceptical about the government’s proposed unbundling of Eskom, and is keen to maintain jobs at the utility, which has over the last 20 years developed close links to the ANC.
For example, government proposals to accel- erate the development of renewables and IPP projects to water down Eskom’s dominance could put jobs at risk in the coal industry as well as Eskom, both key ANC political constituencies.
A key issue in South Africa is whether Eskom is too big to fail, given its dominance of the power
sector and the cost to the economy if the heavily indebted company were allowed to go bankrupt. Chris Yelland, managing director, EE Busi- ness Intelligence, said in South Africa’s biznews. com that Eskom had already effectively failed, and that the government needed to provide a clear, unambiguous and reliable policy on how it will reform the company and put the wider power sector on a surer financial and political
footing.
Crucially, the country does have a plan
of sorts to end the crisis: the 2019 integrated Resource Plan (IRP 2019), and Yelland called for an improved planning system that could be implemented in the short and medium term.
Other reforms include ending Eskom’s monopoly by abolishing the “single-buyer model,”whereEskomismandatedtobetheonly buyer of power from IPP projects. This would allow more municipal generators to emerge, and improve supplies to the vast number of local publicly owned distribution companies, which currently cannot rely on supplies from Eskom.
Looking ahead, Ramaphosa said in a state- ment that a brand new Eskom board would be appointed, with a mix of staff with electricity industry, engineering and corporate governance experience.
Eskom needs to take some hard decisions and work with the planning framework that already exists, rather than attempting to change it, as has been the case with IRP 2019.
While the company has a new CEO in Andre de Ruyter, there is considerable confusion about who actually runs Eskom. With senior politi- cians using the company as a political football, there is a sense of paralysis that is holding back the implementation of any changes that could bring benefits to consumers and the economy as whole.™
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w w w. N E W S B A S E . c o m Week 02 16•January•2020