Who has to take ultimate responsibility for the failure to recapitalize Eskom in the late 1990s to replace its aging power plants and expand its generation capacity? The last few weeks have had us on edge about electricity and fingers are being pointed at the players in the struggles of the state company and the still nascent state of our renewable energy sector.
There is merit to the argument that André de Ruyter may not be the restructuring specialist an institution like Eskom needs. Criticism has also been fair that miners’ supporter Gwede Mantashe may not be the right person to pass electricity market reforms that would shrink the coal industry where he began his work with the National Union of Miners in the 1980s. from 1980.
But they are just two characters from a long cast of actors in the ruinous management of the energy market in the last 30 years. Blaming them or the Minister of the Department of Public Enterprises, Pravin Gordhan, and President Cyril Ramaphosa is a vague assessment of the situation.
In last week’s coverage of the electricity crisis, we tried to identify those most responsible for the sorry state of Eskom. We have been rightly criticized for leaving certain people out and others claim they should not have shown up because they did what was best for the ailing parastatal with the tools at their disposal.
What we wanted to expose was the fact that there is no single individual to blame, but rather the approach of the government since it was first warned in the mid to late 1990s that a crisis was inevitable.
The management of the electricity supply has been catastrophic. All of our presidents, their finance, public company and energy ministers, along with the countless members of Eskom’s board of directors over the years, must be held to account.
In 1994, we had a population of about 43 million with a GDP of about $153.5 billion. Today we are about 60 million and our GDP is valued at more than 419 billion dollars.
This growth occurred mainly thanks to the coal-fired power plants in Mpumalanga that were built in the 1960s and 1970s. These plants have an average lifespan of 41 years, which could be extended to 60 years if properly maintained.
Maintenance took a backseat as Eskom was unable to increase rates to a level that would allow it to properly maintain its operations. The South African National Energy Regulator has come under significant political pressure over the past 15 years from the ANC and opposition parties not to accede to Eskom’s requests.
This week, Ramaphosa joined opposition banks in calling on Eskom not to raise tariffs, a populist move started by his predecessor.
If there are no rate increases and no debt relief for Eskom, then how does the utility maintain its creaky infrastructure?
The hole gets bigger.
