Eskom needs time it just doesn’t have

Just when SA thought there was a light at the end of the tunnel of state capture damage, that light may be about to be turned off by load shedding. The immediate problem for power utility Eskom – one of the most mismanaged parastatals in the history of South Africa – is coal supplies and, specifically, why these may not see our power stations through the cold, dark months of winter.

A lot of the blame, according to industry experts, lies with a well-intentioned, but ill thought-out, plan to empower more black-owned companies through reallocating Eskom’s coal supply contracts.

Historically, these contracts were given to large conglomerates Anglo American, BHP Billiton, Xstrata and Glencore. These were ultralong contracts, which ensured continuity of supply by allowing mining companies the financial peace of mind to invest in maximising efficient coal extraction.

The most problematic “empowerment” coal contract went to the controversial Gupta family, whose Tegeta Resources company bought Optimum Coal Mine in a deal still mired in questions. The supply from that mine – which is now in business rescue – has been problematic ever since.

Yet blaming empowerment projects for the disaster which Eskom has become is only partly correct. There has been a bigger, overall, failure to plan for future power generation capacity, which goes back even before ANC government took over in 1994.

Coupled with that is the vast and, as yet, unpunished corruption, which has gone hand-in-glove with the building of the new Kusile and Medupi power stations, both of which are well behind schedule in terms of full electricity production.

It is comforting to know that there are new brooms sweeping clean in Eskom’s management. But they need time to repair the damage. South Africa doesn’t have that time. So, get your warm woolies, candles and gas stoves ready.