SONA2019: Eskom rejig does not go far enough
8 February 2019
The Democratic Alliance (DA) welcomes President Cyril Ramaphosa’s announcement during the State of the Nation Address (SONA) to split Eskom up, but he has not gone nearly far enough.
Eskom will be unbundled into a holding company, with three separate business entities namely: generation, transmission and distribution and will be wholly owned by the holding company.
This restructuring will entail that each entity has the same holding board. Thus, the intention to stimulate competition in the generation sector of Eskom will be limited by the fact that the entities are not wholly independent entities. Preference and influence will still be possible within the holding board structure.
It also does not go far enough by preparing the generation unit for privatisation to place it on an equal competitive footing with other independent power producers nor does it allow well-functioning metros to be able to source energy directly by independent energy suppliers. Overall, the plan will not ensure a stable supply of electricity at reduced cost for consumers into the long-term.