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Eskom’s move to Mantashe’s department ‘like rearranging deck chairs on Titanic’
Some opposition parties believe the shift is 'a step in the wrong'.
A general view of Eskom’s Tutuka Power Station in Standerton, South Africa. Picture: Gallo Images/Rapport/Deon Raath
Government’s plan to move Eskom into the Department of Mineral Resources and Energy (DMRE) has been met with some skepticism as currently battles load shedding.
The recent announcement that the Department of Public Enterprises (DPE) will be scrapped will see the oversight of Eskom and other state-owned enterprises (SOEs) – including South African Airways (SAA) and Transnet – moved to their relevant government departments.
But some believe this move may lead to the collapse of these entities, specifically with Eskom.
‘Step in the wrong’
As South Africa’s energy crisis continues, the Democratic Alliance (DA) said moving Eskom to the Energy Department, which falls under Gwede Mantashe, was “a step in the wrong”.
“It is well established that the root cause of Eskom’s problems stem from a lack of structural reform, mismanagement, corruption on an industrial scale, inadequate competition in the electricity market, and weak governance and regulation,” the party said in a statement on Thursday.
“Simply shifting the oversight of the company to another government department does nothing to address these underlying issues, and Eskom will continue its current trajectory of financial and operational decline.”
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The party further described the potential move as “rearranging deck chairs on the Titanic”.
“The change in oversight has caused significant financial concern among investors and has led to a number of questions being raised about the future governance structure of Eskom and the status of Eskom’s massive debt.
“The fact that the energy ministry is both a shareholder of Eskom and responsible for regulation and competition in the sector will present a clear conflict of interest,” the DA added.
‘Lack of political’
While the Economic Freedom Fighters (EFF) noted “the long overdue decision” to move Eskom to the Energy Department, the Red Berets said this will not solve the country’s power crisis especially under the ANC-led government.
“South Africa’s overall crisis is the ANC government,” the EFF said in a statement.
The party said it was of the view that the only way to end load shedding was to disband the current administration.
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“The rolling blackouts will continue and escalate regardless of which department oversees Eskom because the mandate of the capitalist establishment remains the absolute collapse of Eskom so it can be privatised,” the Red Berets continued.
“The ANC government has demonstrated its lack of political will to position Eskom to generate dependable and affordable electricity as a public service.”
‘Issues remain unchanged’
Meanwhile, energy analyst Chris Yelland said government’s main agenda should be addressing Eskom’s declining energy availability factor (EAF) rather than moving the power utility.
“It’s like changing the deck chairs on the Titanic. It doesn’t address the real problem! Whether Eskom reports to the DMRE (Department of Mineral Resources and Energy) or to the DPE (Department of Public Enterprises), in immediate terms it makes absolutely no difference.
“The actual fundamental issues remain unchanged, so anyone who thinks this will cause a sudden change in direction in the energy availability factor is wrong. You have to address the fundamental issue,” Yelland told CapeTalk on Thursday.
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He said Eskom’s current situation made it not viable to implement the move, with the power utility’s CEO André de Ruyter set to leave in March and COO Jan Oberholzer retiring in April.
“A change in the way governance takes place may be for be better in the long term theoretically, but in practice can be quite disruptive. And a time of crisis is not the best time necessarily because it adds another level of complexity.”
The country is currently on stage 6 load shedding, and it will remain in place until further notice.
