Process of unbundling Eskom on track – Ramaphosa

President Cyril Ramaphosa has acknowledged that structural problems in the electricity, water, transport and telecommunications industries are some of the main constraints hampering South Africa’s economic growth.

Ramaphosa was addressing the nation in his weekly newsletter ‘From the Desk of the President.’

The country has been plagued by challenges in the electricity, water, transport and telecommunications sectors.

These include frequent bouts of load shedding, concerns around the access to water and sanitation in many communities across the country, with many issues pointing to aging infrastructure and poor maintenance, inadequate and crippled rail infrastructure and the 10-year delay of the auction of high-demand spectrum for mobile telecommunications.

Ramaphosa said these industries are the ‘arteries through which the oxygen of the economy runs’.

To address and overcome these challenges, government set up Operation Vulindlela in October 2020 as an initiative of the Presidency and National Treasury to accelerate structural reforms in these network industries.

Ramaphosa provided an update report on the work of Operation Vulindlela for the first quarter of 2022.

“This includes the auction of high-demand spectrum for mobile telecommunications, the establishment of the National Ports Authority as a separate subsidiary of Transnet. We have also reinstated the Blue Drop, Green Drop and No Drop system for the first time since 2014 to ensure better monitoring of water and wastewater treatment quality.”

Using the energy sector as an example, Ramaphosa said through Operation Vulindlela, government has also been able to take a more focused and holistic approach to reforms, ensuring better coordination where multiple departments and entities are involved.

“Milestones include the raising of the licensing threshold for new generation projects to 100MW, allowing these projects to connect to the grid and sell power to customers. Changes to the regulations on new generation capacity have allowed municipalities to procure power independently for the first time.”

“The process of unbundling Eskom is on track, with the entity meeting its December 2021 deadline for the establishment of a National Transmission Company. By December this year we hope to complete the unbundling of Eskom’s generation and distribution divisions,” Ramaphosa said.

Ramaphosa said while South Africans expect immediate results, many of the reforms are complex, involving new ways of working and even the establishment of new institutions.

“In some cases, it will take time for us to see their full impact. Yet they are the only way to shift our economy from stagnation to dynamism. I would encourage those who continue to raise concerns about the slow pace of reform to read this latest report.”

Ramaphosa has also called on business and investors to take advantage of the changes that are underway and turn their pledges and commitments into tangible, job creating investments.

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