President Cyril Ramaphosa says he will soon announce a package of reforms to address the country’s ongoing load shedding and power crisis.
Addressing the inaugural Black Industrialists and Exporters Conference in Sandton on Wednesday (20 July), the president said the country’s black industrialists, like every other actor in the economy, can simply not grow without a reliable supply of affordable energy.
“That is why I have brought together all relevant departments and entities to work on an integrated set of measures to add additional power to the grid in the shortest possible time,” he said.
“We are currently engaged in consultations with social partners on these measures and will soon be able to announce a package of measures that provides an effective response to our energy crisis.”
Ramaphosa also committed to reforms in a number of other areas to assist the business sector – including the country’s deteriorating infrastructure and transport network.
“We should be discussing the steps we have taken – and still need to take – to significantly improve the state of our ports, rail lines and roads. We need to discuss the far-reaching reforms we are taking in telecommunications, energy and water to improve the competitiveness of our economy and reduce the cost of doing business.
“These reforms are all necessary if we are to create conditions that enable black industrialists to emerge, grow and flourish. In particular, we need to act decisively and urgently to end the load shedding that is causing such damage to our economy and such disruption to our society.”
A second Eskom?
The ruling African National Congress is considering forming a second state-owned power utility to challenge Eskom’s monopoly in the country.
Presenting at the South African Communist Party’s elective congress on Friday (15 July), the president said that establishing a new utility would help reduce the risk posed by Eskom’s failings.
He added that the proposal was originally made by Energy and Mineral Resources minister Gwede Mantashe after the power utility recently plunged the country into stage six load shedding.
“Eskom has been operating as a monopoly for over 100 years and having one company taking up the role of providing energy to the entire country poses a great risk. If it fails, its failure becomes a peculiar failure for the entire country,” he said.
“Look at China. It has a number of state-owned power providers who compete among themselves ensuring that the price of electricity is greatly reduced.”
Eskom poses a significant risk to South Africa’s economy and public finances, with the government guaranteeing as much as R350 billion of its debt. The utility has been intermittently cutting 6,000 megawatts from the grid since last month, leaving the country in darkness for hours at a time and further constraining industrial output and growth.
Ramaphosa is expected to address the nation in the coming days on his government’s new interventions around load shedding. It is not clear whether the formation of a new power utility forms part of the new interventions.