OPINION | Ditch BEE at Eskom: ‘Merit over melanin, practicality over politics’

South Africa is in the grip of load shedding once again, the worst it’s ever been, and the BEE impact at Eskom should not be ignored, writes Gabriel Crouse.

President Cyril Ramaphosa was moved to concede in his latest newsletter that the South Africans have every right to be angry and frustrated.

In his inimitable style, he went on to say: “There is no reason why a country like ours – with the skills, capabilities and resources we have at our disposal – should have to endure a shortage of electricity.”

There is certainly nothing inherent in SA’s DNA that conspired to produce our current impasse, and we have what it takes to change the trajectory.

But there are reasons we are where we are, and simple reasons things keep getting worse.

Skills and capabilities have been systematically squandered

These are to be found in the policy choices that SA’s authorities have made.

“Skills, capabilities and resources” have systematically been squandered, excluded or misused. Here one need not speak only of corruption but of the conscious choices and predictable outcomes of policy.

This has become obvious enough (once again) to Public Enterprises Minister Pravin Gordhan that he not only called to “cut the damn red tape” at Eskom, but also authorised the return of skilled experts who had
been ejected to deal with what Eskom CEO André de Ruyter called “legacy race issues”.

A central issue had been application of broad-based black economic empowerment (B-BBEE) criteria in Eskom’s very considerable procurement spend.

Privatise Eskom, we don’t need another SOE sucking Treasury dry

The adverse impact of the policy cannot be ignored: neither in Eskom nor in respect of the country in general – in light of the recent release of the report of the Zondo commission.

The report described an “inevitable tension” between penny-pinching and colour-coded procurement and concluded: “Ultimately… the primary national interest is best served when the government derives the maximum value-for-money in the procurement process and procurement officials should be so advised.”

Eskom’s failure will cripple South Africa

Eskom’s failure undermines the foundations of South Africa’s economy and with it, its very future. Every advantage needs to be leveraged to get the utility – and the economy – back on track.

Paying premiums on the procurement of goods and services on the pretext of “empowerment” may work
well for a small coterie of people (a good many who are able to leverage their political connections), but it imposes a significant cost on the country as a whole.

Earlier this year, the Institute for Race Relations (IRR) pointed out that Finance Minister Enoch Godongwana has the power to grant BEE procurement exemptions if that is “in the public interest”.

ALSO READ: SA can’t rely on single state utility any longer, says Eskom board member amid load shedding

Shortly thereafter, exemptions were temporarily granted to organs of state, including Eskom.

The question that stands before SA is whether it is in the public interest to maximise value-for-money procurement at Eskom to minimise load shedding?

It may be that De Ruyter has already received this advice since – when he was recently asked about the case for BEE exemptions from procurement – he said “interposing non-value-adding intermediaries” increases costs, and there is, therefore, a “strong case” to streamline instead.

Ramaphosa also wrote: “This is no time for business as usual. We need to act boldly to make load shedding a thing of the past.”

Discard B-BBEE in favour of efficiency

Discarding B-BBEE in favour of an efficiency and cost-effectiveness model would be a logical place to start.

The signs from the government on this raise doubt that it would consider this. Continuing its past errors, this is a choice it is making.

It doesn’t matter how one looks at it, South Africans will need to fight load shedding together. The only way out of load shedding is more reliable power generation at the lowest price, which is not going to happen if citizens do not insist on that emphatically.

ALSO READ: Back to the drawing board: How to make BEE work

That is why the IRR has launched a new campaign to fight load shedding by stopping B-BBEE at Eskom.

Signatures will be gathered to deliver to Godongwana to grant BEE exemptions from Eskom procurement.

When ordinary South Africans buy products, they don’t check the race of the producer, they check the price and the quality.

Government spending should use the same common sense.

SA must be rid of race-power – whether it is white power or black power. It needs only electrical power to heat, light, cook and work. We need the electrical power that makes traffic lights work – green, red and orange.

We need the power that makes the wheels of industry turn.

With our fate at stake, the focus has to be merit over melanin and practicality over politics.

Crouse is the Institute for Race Relations’ head of campaigns