{"id":605866,"date":"2022-07-13T07:06:02","date_gmt":"2022-07-13T05:06:02","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=605866"},"modified":"2022-07-13T07:06:02","modified_gmt":"2022-07-13T05:06:02","slug":"south-africa-labour-minister-to-oppose-any-eskom-sale-plan","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/energy\/605866\/south-africa-labour-minister-to-oppose-any-eskom-sale-plan\/","title":{"rendered":"South Africa labour minister to oppose any Eskom sale plan"},"content":{"rendered":"

South Africa\u2019s labour minister said he\u2019ll oppose any move to privatize the beleaguered power utility Eskom Holdings, as it struggles to generate power, avoid outages and repay $23 billion of debt.<\/p>\n

Privatizing the company would be detrimental to the poor, Employment and Labour minister Thulas Nxesi said in an interview. While president Cyril Ramaphosa\u2019s government has previously denied any plans to sell the company, there have been calls to divest from the asset. S&P Global Ratings said privatization may be the best option to resolve the power crisis in Africa\u2019s most-industrialized nation.<\/p>\n

\u201cI am not a proponent of privatization of key state assets,\u201d said Nxesi, who\u2019s also a leader of the South African Communist Party. \u201cIf you privatize electricity, you can forget about the majority of people having access to electricity, it is going to be very expensive for them. That\u2019s why government steps in when there is market failure.\u201d<\/p>\n

Eskom poses a significant risk to South Africa\u2019s economy and its public finances, with the government guaranteeing as much as R350 billion ($20.6 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.<\/p>\n

\u201cI see the energy issue as an economic crisis,\u201d Nxesi said.<\/p>\n

\"\"<\/a><\/p>\n

Operational issues at Eskom pose a risk to South Africa\u2019s economic outlook and the utility\u2019s revenue is insufficient to reduce its R396 billion of debt, according to S&P Global Ratings. Shifting the company\u2019s obligations onto the state\u2019s balance sheet would precipitate a marked deterioration in the state\u2019s debt.<\/p>\n

\u201cThese utilities typically tend to be a problem, but then the ones that have done better are the ones that have done some kind of a wholesale privatization,\u201d Ravi Bhatia, director and lead analyst for Africa at S&P Global Ratings said in an interview. \u201cThen the problem at least is no longer the government\u2019s and typically the utilities run better.\u201d<\/p>\n

The administration is in the process of breaking up Eskom into three separate entities — power-transmission, generation and distribution.<\/p>\n

Reducing Eskom\u2019s debt is one of the critical things that will enable the utility to resolve some of it\u2019s operational issues, but this needs faster implementation from government, according to the Congress of South African Trade Unions, an ally of the ruling African National Congress.<\/p>\n

\u201cFor us there are two major issues around Eskom, one is the resources, they need money to invest in new generation and to ramp up maintenance. You have to cut the debt by half to free up that kind of capital,\u201d Matthew Parks, parliamentary coordinator at Cosatu, said in a separate interview.<\/p>\n

Ramaphosa has also announced policy changes to cut excessive bureaucracy and enable private investors to build their own power plants with up to 100 megawatts of generating capacity without requiring a license. The state has also encouraged more support for renewable-energy projects to supplement the country\u2019s needs.<\/p>\n

Nxesi said the governing African National Congress could upset South Africans if it\u2019s unable to resolve the energy crisis by 2024, when the next general election is set to take place.<\/p>\n

\n

Read: South Africa wants to create 2 million jobs before 2024 election<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa\u2019s labour minister said he\u2019ll oppose any move to privatize the beleaguered power utility Eskom Holdings, as it struggles to generate power, avoid outages and repay $23 billion of debt.<\/p>\n","protected":false},"author":59,"featured_media":551564,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9874],"tags":[1164,26,11449],"class_list":["post-605866","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-eskom","tag-headline","tag-sp-global-ratings"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/605866","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=605866"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/605866\/revisions"}],"predecessor-version":[{"id":605870,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/605866\/revisions\/605870"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/551564"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=605866"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=605866"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=605866"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}