Mantashe’s 'new generation entity' is just more madness

20 February 2020

At his post-State of the Nation Address (SONA) press briefing today, Minister of Mineral Resources and Energy, Gwede Mantashe, doubled down on his left-field idea of a new electricity generation entity “outside of Eskom”.

Minister Mantashe first proposed this madcap idea at the Mining Indaba a few weeks ago. Today, he stated that “[the new power generation entity] is a reality, and we will make it happen.”

It is noteworthy that Mantashe is the only person who is suggesting such lunacy. He did not mention it during the SONA debates, nor did President Cyril Ramaphosa. There is no mention of it in the Department of Mineral Resources and Energy Annual Performance Plan, nor has it been discussed in any other forum to date.

It therefore appears that the Minister is floating a trial balloon to centralize this new entity (and indeed all electricity production) under his control.

Energy experts agree that any new generation capacity must (at least in the short to medium term) come from the private sector. The Democratic Alliance (DA) has proposed a private members bill to facilitate this – the Independent Electricity Management Operator Bill. This Bill is currently before the Portfolio Committee on Mineral Resources and Energy, and would open up South Africa’s electricity supply sector and make it more competitive. It would allow Independent Power Producers (IPPs) to compete on an equal footing with Eskom.

But the Department of Mineral Resources and Energy has already indicated their lack of support for this initiative, although their objections, thus far, are spurious and ill-informed.

A new generation entity is nothing more than a blatant power play by Minister Mantashe. Eskom is already more than R450 billion in debt, andspiraling closer to death every day that passes. South Africa cannot afford more government mismanagement, corruption and incompetence in the electricity sector. We must oppose this madness at every turn.

Issued by Kevin Mileham, DA Shadow Minister of Mineral Resources and Energy, 20 February 2020