The Democratic Alliance (DA) on Friday welcomed the splitting of Eskom into three separate units, but said this had not gone nearly far enough as the ruling African National Congress (ANC) would still have a stranglehold on the generation unit.
Speaking during the state of the nation address (Sona) on Thursday night, President Cyril Ramaphosa said Eskom would be split into three separate entities as part of new business model the cash-strapped electricity utilities would need to develop.
“To bring credibility to the turnaround and to position South Africa’s power sector for the future, we shall immediately embark on a process of establishing three separate entities – generation, transmission, and distribution – under Eskom Holdings,” said Ramaphosa at the time.
However, on Friday, DA spokesperson on public enterprises Natasha Mazzone said the intention to stimulate competition in the generation sector of Eskom would be limited because they would not be wholly independent entities as each entity would have the same holding board of the holding company.
Mazonne said as a result, preference and influence would still be possible within the holding board structure.
“It also does not go far enough by preparing the generation unit for privatisation to place it on an equal competitive footing with other independent power producers nor does it allow well-functioning metros to be able to source energy directly by independent energy suppliers,” she said.
“Overall, the plan will not ensure a stable supply of electricity at [a] reduced cost for consumers into the long-term. This means that Eskom’s request for tariff increases remains a reality and the ANC will continue to place the burden of their failures on South Africans.”
The DA has been calling for de-politicising and privatisation of Eskom since 2014, saying this would ease financial pressure on the state by getting private investors to fund electricity supply generation. It would also increase efficiency by introducing competition and drive job creation.
The troubled state-owned power utility is expected to post a R20.1 billion loss for the financial year to March, up from the R15 billion the forecast during the mid-year results, as overall expenses widened during the period.
– African News Agency