DA says it’s irrational and disastrous to move Eskom to Energy Department

An Eskom coal fired power station in Johannesburg. File Picture: EPA.

An Eskom coal fired power station in Johannesburg. File Picture: EPA.

Published Jan 10, 2023

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The DA’s Ghaleb Cachalia has described a proposal by President Cyril Ramaphosa to move Eskom from the Department of Public Enterprises to the Ministry of Energy as irrational and disastrous.

The ANC adopted a resolution at its national elective conference last week which specified that state-owned companies operating in specific economic sectors, should be overseen by the relevant government departments.

Eskom is mired in a national energy crisis that has seen the state-owned entity become the greatest inhibitor to economic growth and job creation and constant bail outs have seen it draining the national fiscus.

The country experienced 205 days of rolling blackouts last year.

Cachalia said the country’s official opposition party was against the move and would fight it.

“We share the opinion of Professor Anton Eberhard who has warned that it would be a grave mistake to move Eskom to the 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,” Cachalia said.

The DA says if the move takes place, Eskom will never be fully unbundled and 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 load shedding will flourish again. The move also has potentially significant financial implications which we are busy unravelling.

“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,” Cachalia said in a statement.

Eskom CEO Andre de Ruyter announced his resignation from the power utility late last year but will remain in the position until March until a new CEO is appointed.

Cachalia said in the run-up to De Ruyter’s resignation, Energy Minister Gwede 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.”

Cachalia said while it is possible to fix Eskom 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”.