Eskom: Urgent and pragmatic intervention needed to avoid a total grid collapse

10 March 2022

Note to Editors: Please find an attached soundbite by Ghaleb Cachalia MP

As South Africa slides into an electricity disaster that threatens to collapse the national grid, the government and Eskom have already found a new scapegoat to blame after Covid.

We are now being told that rising fuel prices occasioned by the war between Russia and Ukraine and the procurement of operational equipment from Russia for our nuclear power station at Koeberg could pose a further threat to generation capacity.

This is dishonest and disingenuous. We have had an electricity generation crisis for the past 14 years and the inescapable truth is that the ANC, who has headed successive governments over this period, is single-handedly responsible for the debacle.

The latest round of loadshedding by Eskom, including the chilling admission that stage 6 loadshedding is now increasingly likely, is a consequence of:

Eskom’s inability to accurately project and secure its diesel requirements; and

The utility's inability to plan maintenance on its coal power plants and manage electricity supply and demand - against a background of self-generated and eye-watering levels of debt that fed a venal /and corrupt regime.

Instead of attending to the urgent stabilisation of the base load and the opening up of the market to diverse private sector players - on a source-agnostic basis - the ANC government, after the proverbial horse had bolted, has acted as an enabler to Eskom’s continued use of crisis electricity generation - at huge and unsustainable cost.

The loss of serious expertise in key areas, their replacement with sub-standard deployees, ongoing corruption, the imposition of a cost-crippling procurement regime and the paucity of top-tier management that is both up to the challenges and able to stand up to the dictates of a shareholder who is hell-bent on centralised control, lies at the heart of the problem.

A succession of plans, the installation of councils, changes at board level and the ham-fisted focus by management on inadequate measures to deal with the crisis had hardly alleviated the predicament.

With an economy that is predicted to grow at a snail’s pace as we emerge from Covid, the woes inflicted on us by Eskom will accelerate the downward spiral of both the utility and the economy - relationship between the two is inextricably symbiotic.

The time has come to narrow the focus on what is salvageable and to ensure with laser-like attention, in an environment unfettered by self-imposed obstacles, that this is done. The gaps in generation have to be identified and plugged responsibly by both interim measures and an immediate commitment to a level and open playing field for all players outside the confines of the failing monopoly.

The model has to change to deal with the factors that combine to distort the energy market and continue to fuel spiralling energy costs.

Faced with this existential threat, President Ramaphosa has now proposed a new entity to manage all SOEs, including Eskom - the same old command and control at a centralised level. In the absence of a will that focuses on fixing what is fixable and that opens up the participation of the private sector in the energy (and other) markets, the council is doomed to be a spectator as the fortunes of our country diminish.

Issued by Ghaleb Cachalia, DA Shadow Minister of Public Enterprises, 10 March 2022