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

You have to wonder, sometimes, if the ANC gets its policy plans straight from the Mad Hatter’s tea party. President Cyril Ramaphosa’s idea for dealing with our worst collapsing state-owned enterprise, Eskom?

Build another one like it, also controlled by the government.

Unsurprisingly, he flighted the scheme at the SA Communist Party’s 15th annual national congress, playing to the gallery for an audience which is still living in the last century when it comes to ideology and its understanding of modern economic realities.

State enterprises worked quite well in the Soviet Union of Joseph Stalin… because he shot anyone who argued or tried to get their hands on more loot than him. In SA, though, another SOE is, we believe, just another opportunity to make the cadres’ looting circle bigger.

A lot of loyal ANC comrades need to eat.

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Ramaphosa’s proposal goes against the views of most economists, who believe the only way to save Eskom – and the entire South African electricity grid – is to privatise the utility.

Critics, however, have pointed out that while private utilities proved reliable power supplies, some cannot resist the impulse to price gouge.

We are also extremely worried that, as Ramaphosa said, the proposal for another power SOE came from Energy and Mineral Resources Minister Gwede Mantashe, who has been an outspoken proponent of continuing to use coal-fired power stations while resisting efforts to bring renewable energy resources into the national mix.

At the same time, Mantashe has been almost fanatical in his support for the floating power stations proposed by the Karpowership company, which would see hundreds of billions spent to boost Eskom.

There must be a middle way: a controlled privatisation which brings investment and global best practice to Eskom in return for reasonable profits.

We don’t need another SOE sucking Treasury dry.