ANC plans for Eskom likely to worsen load shedding, maladministration woes

Plans to move the cash-strapped and embattled power utility, Eskom from the department of Public Enterprise to that of Mineral Resources and Energy, is a terrible idea, which are likely to add to instability and maladministration at the floundering entity, according to energy expert Hilton Trollip.

Following the African National Congress’ (ANC) extended national conference last week, it was resolved that state companies operating in specific economic sectors should be overseen by the relevant government departments.

Party president Cyril Ramaphosa was also quoted as saying this resolution will be implemented and that government will decide how and when it will be done.

Such a move could mean entities such as Eskom and Transnet would move to the department of Mineral Resources and Energy and Department of Transport, respectively, rather than under the Department of Public Enterprises (DPE) where they currently reside.

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The Transport Department will soon get a new political head following the election of Fikile Mbalula as secretary general of the ANC in December, while minerals and energy is headed by Gwede Mantashe.

Paving the way for more state capture

Speaking to The Citizen on Wednesday, Trollip questioned the move, saying it could worsen instability, uncertainty and maladministration.

“The ANC through interfering with proper governance structures required by legislation and agreed government structures have over the past 10 years created the space for gross maladministration, the worst of which has been State Capture,” Trollip lamented.

“Instead of dealing with this gross maladministration, they are finding scapegoats such as the CEOs of Eskom and making further moves such as the decision to move SOEs and their line departments. They are creating the same space that they created for state capture, for special interests, to directly work with ministers to undermine basic democracy, democratic policy making, and democratic policy implementation and proper administration of SOEs,”

What are the effects of such a move?

Trollip believes the effect of the move, if it happens as President Ramaphosa says, will result in even more uncertainty piled atop the current chaos resulting from the previous Eskom board, half of which resigned by around July last year, forcing the recent appointment of a brand new board.

Add to that the fact that Eskom CEO André de Ruyter has also thrown in the towel, following threats, allegations of destabilising government, and most recently, an attempt on his life.

“So, if Eskom is moved under the Department of Mineral Resources and Energy, there will be a new board which will cause more instability or most likely, according to President Ramaphosa, it will take some time to move it. Thus, in the meantime the current board will be a lame duck board, whichever CEO goes in will be a lame duck CEO, and instability and the politics and governance problems will increase, and stagnation and the decline in the economy driven by an energy shortage will continue,” Trollip warned.

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What could have prompted this new ANC policy?

Trollip is of the opinion that some powerful ministers could have gone into the ANC conference with the idea to force such a policy through the conference.

“It wasn’t properly discussed, there’s no conference records for such a major policy decision to be taken properly… It is desperate, it is reckless, and I think it is about a small group of people, possibly with Mantashe at the lead, trying to force a particular energy policy onto our democracy.

“The type of policies that should come out of our democratic government according to our Constitution, should be developed in consultative processes by government and not just in a desperate move forced onto our government by the ANC, and this is most irresponsible and reckless behaviour,” said Trollip.

Trollip says the ANC’s national conference in December last year was a brutal battle between different groupings for leadership positions in the ANC’s National Executive Committee (NEC).

As a result, it could not have been possible under those conditions for them to have had any reasonable or sensible discussion to come up with such a major policy as changing the structure of government to run SOEs.

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Load shedding prognosis for 2023

Many parts of the country were again plunged into darkness on Tuesday night, thanks to the ramping up of load shedding to stage 6.

As the new business year kicks into gear and factories start to use more electricity, the demand will increase even more, and due to inadequate supply, it is most likely that load shedding will escalate as well.

Trollip says as the year proceeds, this is most likely to get worse.

“There is some extra supply coming online because of the exemption given for Independent Power Producers (IPPs) connecting directly to private sector buyers and some municipalities, and that’s only going to start coming onto the grid very slowly, because the exemptions were only given last year.

“That will provide some relief, because private sector customers with IPPs will sort themselves out, but it won’t provide much relief for the public system,” Trollip said.

Trollip said little to no new energy is coming onto the system via the public managed generation capacity expansion plan, which is governed by the integrated resource plan run by the Department of Mineral Resources and Energy (DMRE), stressing that the first substantial suppliers will only be coming on in 2024 and 2025.

Even they, however, fall far short of what’s required to get over load shedding.

“The reason they are far short is firstly because they are years late, because they were delayed by the department and secondly, when the department ran the bid windows, it ran them in a way that they didn’t ask for enough to end load shedding. As well as the inflexibility of the system that’s being used and how it’s being used, this has made the bid window 5 achieve far less than it should have, and bid window 6 even less,” Trollip added.

Prepare to hover between stages 3 and 6 for months to come

Meanwhile another energy expert, James MacKay, CEO of the Energy Council of South Africa (ECSA), says we will likely continue to cycle between stage 3 and 5, with some stage 6 for at least the next six to seven months.

“There are a number of units planned to return to service by mid-year, including Koeberg, Kusile, Matla and Medupi, and this will alleviate some of the pressure but Eskom is seldom able to keep to committed deadlines.

“Load shedding is forcing a big increase in government’s focus on Eskom, which is welcome and this has expanded to include operations, maintenance, corruption and criminality. There is a lot that has been said in the media on these issues and the ambitions are good,” said MacKay.

He said while the issues in question are the right things to do, there is no clarity on how and who will be held accountable and by when.

Questions over holding Mantashe to account

MacKay also had his doubts over the decision to move Eskom under the sole purview of Mantashe’s department.

“This is clearly not a good governance move as it puts policy, implementation, and market monopoly all under single control. That said, the DPE has done little to turn around any of the failing SOEs, and is broadly underperforming, so it could be argued that DMRE will have better ability to take action and move quickly to deal with Eskom issues.

“There is no indication, however, that the DMRE minister will be held accountable for this new authority he’s been given and this is a concern,” said MacKay.

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