Rearranging deck chairs on the Eskom Titanic?

Despite many mentions of Eskom in this week’s budget, the slim annexure to the Budget Review on plans to reconfigure the utility suggests that unbundling it has yet to be thoroughly thought through.

The annexure does say “the corporate restructuring and turnaround will be unprecedented in SA”. But it also says that, by mid-2019, a new transmission company will have been established.

It will include the transfer of staff, power lines, substations, the national control centre, property rights and peak power stations. The transmission licence will be amended and supply agreements transferred. And it will have its own board. In four months.

New structures have yet to solve problems at Eskom. In 2014, the cabinet announced the setting up of a war room to deal with the electricity crisis. Yet here we are. And before the war room (after the electricity crisis of late 2007 and early 2008), the government developed the National Response Plan. Power stations were in bad shape then, and coal supply was a problem.

Strong economic growth up to 2008 and a massive electrification drive since 1994 meant demand had increased sharply while little new capacity was added. Yet effective management would have responded timeously and ensured sufficient coal reserves at power stations. Poor planning once again resulted in no diesel supplies for peak plants, contributing to the recent load shedding.

The National Response

Plan aimed to cut demand and solve supply issues. The former came back to bite Eskom as revenue fell — selling electricity is, after all, its core business. And the latter — well, we’re having the same discussion 11 years later.

State capture disastrously diverted attention from solving Eskom’s issues and created new problems. So, late last year, President Cyril Ramaphosa set up the Eskom Sustainability Task Team.

This brings me to the soon-to-be-appointed chief reorganisation officer, who will work with Eskom’s board and management to implement the task team’s recommendations.

Finance minister Tito Mboweni said support for Eskom is conditional on this appointment. But why do we need another layer of oversight and the cost of staffing this office? Eskom has an executive team, and a board. The department of public enterprises has a minister, a deputy minister and a director-general and staff. There is the National Electricity Regulator SA, and the National Treasury also keeps close tabs on the utility. Can people not just do their jobs, already?

The plans for Eskom look like rearranging the deck chairs.

Perhaps most telling are these words in the annexure: “At this stage, Eskom

Holdings is proposing to establish separate subsidiaries …” Does this mean that, at another stage, South Africans will be presented with yet another new plan?

Eskom has been sinking for years while repeated rescue plans have failed