Bringing in a strategic equity partner in embattled Eskom is an urgent matter that can no longer be delayed if the economy is to thrive.
This is the view of ANC treasurer general Paul Mashatile, a man likely to be the second-most powerful person in the country should he be elected as President Cyril Ramaphosa’s deputy when the governing ANC elects its leaders in a few weeks’ time.
Mashatile said the time had come for ANC leaders, both in the government and in the party to be decisive on Eskom without fear of being labelled as “privatisation obsessed”. He said instead, the priority should be to do what is in the best interest of South Africa and its citizens.
“If we don’t change our approach in terms of how we deal with issues of energy, anyone who goes to lead Eskom will fail. My own view is that the government begin to move with speed to bring the private sector on board. Eskom does not have enough resources and they have been trying to raise tariffs all the time,” he said.
“I think we need to be bold and say when we talk about public-private partnership, maybe this is the real element we need at Eskom. If there is a candidate for public-private partnership, it is Eskom. In 2018, I said to comrades that Eskom is a big elephant, why don’t we unbundle it and have one company that is focusing on generation, another on distribution and the last one on transmission, and that argument won the day.”
Ramaphosa in his 2019 state of the nation address announced that the government had begun a process of splitting the power utility into three units, namely: generation, transmission and distribution.
Mashatile said the private sector was ready and willing to play a role in Eskom, and this should not be feared. “We can’t afford to fail when it comes to energy supply. For me it is not just a question of changing the board or the minister responsible. It’s a matter of bringing in the expertise that will be able to help run these power stations and bring the necessary resources that will help.”
The mere mention of a “strategic equity partner” in most of the country’s cash-strapped state-owned enterprises has been seen as a code name for privatisation to the conservatives in the ANC and its alliance partners, SACP and Cosatu.
Minister of Public Enterprises Pravin Gordhan and Ramaphosa have spent the better part of the past four years trying to fend off allegations they were hellbent on selling SOEs to their “friends”.
In May last year, Gordhan said the government had sold a 51% stake in embattled SAA to Takatso consortium. The deal, he said at the time, would see Takatso take 51% ownership of SAA, with the government retaining a 49% stake. This followed years of multi-billion-rand taxpayer funded bailouts.
Mashatile said he was not advocating for the privatisation of Eskom. “It is important to bring in private equity partner at Eskom as minority partners. So, all three companies must remain state-owned. But we must also be transparent when we bring in private equity partners because that is where suspicions we want to private SOEs come up,” he said.
Eskom has haemorrhaged billions of rand over the years, with its debt pile currently sitting at R400-billion.
Finance Minister Enoch Godongwana last month used the medium-term budget policy statement to announce that government would step in and takeover a large chunk of Eskom’s debt.
“To ensure Eskom’s long-term financial viability, government will take over a significant
portion of the utility’s R400-billion debt.
While the selection of the relevant debt instruments and the method of effecting the relief is still to be determined, the quantum is expected to be between one-third and two-thirds of Eskom’s current debt,” Godongwana said.
Outages make companies breathe through the wound.
The latest financial results and trading updates issued by companies listed on the JSE have laid bare the damage Eskom’s rolling power cuts are causing to the economy.
TFG, which owns brands such as Foschini and Markham, said it had lost 132 000 trading hours during the first half of the financial year and was investing in back-up power solutions, which were installed across stores throughout SA.
Pepkor, the parent company of Pep and Ackermans, said during the first half of 2022, loadshedding increased by 80% compared to the prior year. The group added that it lost 313 000 trading hours due to loadshedding.
Shoprite revealed that it spends a mammoth R100-million on diesel every month to keep the lights on at its stores across the country.
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