ANC does not benefit from keeping Eskom state-owned: Gordhan
Public Enterprises Minister Pravin Gordhan says South African citizens benefit from keeping Eskom state-owned, not the African National Congress (ANC).
In a written reply to a question in the National Council of Provinces (NCOP), Gordhan said that there is no government policy on the privatisation of Eskom.
Per the department’s plan for Eskom in a reformed electricity supply industry, the minister said that Eskom is currently being separated into three subsidiaries under Eskom Holdings – Transmission, Distribution and Generation.
“The objective of the roadmap is to increase transparency, cost efficiencies and foster competition in the electricity sector. The generation, transmission and distribution divisions have been functionally separated
and divisional boards are in place,” Gordhan said.
He added that the National Transmission Company of South Africa (NTCSA) is awaiting to see if it will receive a trading license from the National Energy Regulator of South Africa (NERSA) after making an application in April 2023.
The Distribution Company (NEDC) was also registered in October 2022, and a PFMA 2 application to share assets from Eskom Holdings to the NEDC is being reviewed.
“The due diligence for the legal separation of the Generation Division has been completed and a New Company will be established once the required legislative amendments are in place to enable such. An intergovernmental steering committee is in place to unlock challenges and address interdependencies,” he said.
Who benefits
Gordhan noted that the ANC does not benefit from Eskom being a state-owned enterprise (SOE), saying that it is the people of South Africa who benefit as Eskom plays a significant role in creating and enhancing economic and social well-being for all South Africans.
He said that SOEs have a dual commercial and development mandate, with the state’s development goals including the electrification of rural households, helping to develop skills, localisation and transformation.
Eskom has achieved some of these goals, particularly the electrification of rural households, as, according to the World Bank, the percentage of the population that has access to electricity increased from 57.6% in 1996 to 89.3% in 2021.
However, the SOE is now causing the South African economy major damage through its inefficiencies.
The one area where Eskom is clearly failing South Africans is the increased severity of load shedding, with the power utility failing to meet the country’s electricity demand.
Although Eskom has attributed a recent lessening in the intensity of load shedding to its increased performance, a reduction in demand has been the key catalyst for load shedding remaining at lower stages for most of this winter.
For example, when a cold front hit parts of South Africa last week, demand increased to a relatively normal level for winter, which forced Eskom to implement stage 6 load shedding.
Not only is Eskom failing to provide electricity, but it is doing so while bleeding the country financially.
In a separate parliamentary Q&A, Gordhan said that Eskom received over R180 billion in bailouts over the last five years.
The embattled power utility was also unable to provide any dividends over the period, with South African coffers receiving no direct financial benefit from the company.
| Year | Bailout | Dividends |
|---|---|---|
| 2018/19 | R23 000 000 000.00 | R0.00 |
| 2019/20 | R49 000 000 000.00 | R0.00 |
| 2020/21 | R56 000 000 000.00 | R0.00 |
| 2021/22 | R31 700 000 000.00 | R0.00 |
| 2022/23 | R21 900 000 000.00 | R0.00 |
| Total | R181 600 000 000.00 | R0.00 |
Feeding trough
Gordhan’s comments that the ANC does not benefit from keeping Eskom a public institution counters allegations from former Eskom CEO, Andre de Ruyter, who infamously claimed that the party was using the embattled utility as a ‘feeding trough’.
Speaking to eNCA’s Anika Larsen earlier this year, de Ruyter alleged that high-level politicians from the ANC were aware of and actively involved in corruption at Eskom.
When Larsen asked de Ruyter if the ANC sees Eskom as a “feeding trough,” he said that evidence indicated this was the case.
In the interview, and in his book, de Ruyter said that Gordhan was informed and knew of the politicians involved.
Speaking before the Standing Committee on Public Accounts (Scopa), Gordhan denied that Eskom was a “feeding trough” for the ANC but admitted there are links between the ANC’s investment arm, Chancellor House, and the corruption at Eskom.
Renewable problem
In his response before the NCOP, Gordhan also said that SOEs will play a crucial role in helping the country to higher levels of development via the introduction of new technologies, such as renewable energy and batteries for major storage applications.
He said that Eskom plays an integral role as the buyer of energy from independent power producers, as it supports the Renewable Energy Independent Power Producer Programme (REIPPP) and the implementation of the 2019 Integrated Resources Plan (IRP).
However, despite several private renewable energy projects in the pipeline, grid constraints have meant that many are currently in limbo.
Eskom has also recently introduced new rules to grant equal grid access to stations based on their demonstrated readiness, which it said could help prevent “grid-capacity hogging.”
To obtain a grid connection, developers are now required to fulfil several other additional conditions, such as environmental and water usage rights, one year’s data on available solar and wind availability and a signed power purchase agreement.
Chairman of SAIPPA Brian Day said that the new rules will increase the amount of money that developers must spend, with Eskom now making it more difficult for IPPs to access the grid.
Loading ...