Eskom just has to take a leaf from SAA’s books

CHEER up, the government has a solution to the Eskom catastrophe. “We’re not in a crisis because we’ve got a solution,” Public Enterprises Minister Lynne Brown told the media after President Jacob Zuma’s state of the nation address.

The secret solution is to place Eskom under South African Airways (SAA) management. This follows the Mail & Guardian’s expose of SA “sinking into Eskom’s black hole” (February 6). So someone other than a neoliberal free-market fundamentalist comprehends the magnitude of the catastrophe. Within a decade, someone in the government will call the catastrophe a crisis instead of a challenge. After another decade, someone in Eskom will think there’s a problem. Armed with expertise from perpetually unfinished power stations (Medupi, Kusile and Ingula) about what not to do, Eskom will start again, hoping to get it right next time. Eskom blames the National Energy Regulator of SA for not granting price increases exceeding 1,000% in a few years, and the mean minister of finance for not rewarding failure with subsidies. As SAA has never had this problem — it gets what it wants — Eskom will be a subsidiary of SAA, whose managerial ingenuity enabled it to perfect the matching of failure with subsidies. The secret, never grasped by Eskom, is the strategic use of strategic words like “strategic”. Calling idiotic ideas such as routes without passengers “strategic” is mother’s milk for politicians. They will have wobbly knees when SAA managers say blackouts, unfinished power stations and budget overruns are “strategic”.

Eskom’s managers tried the name game, thinking that by calling blackouts “load shedding”, this would turn shortages into savings. What clinched it for SAA is that it did the opposite. Instead of load shedding, SAA maximised route shedding, plane shedding, staff shedding, loss shedding and waste shedding.

The other trick SAA management will bring is “turnaround strategies”. Turning politicians around makes them too dizzy to stay balanced. SAA is so good at turnaround strategies that cabin crews offer them to passengers. “We don’t have enough fuel for our destination, so we have a turnaround strategy: to return to the port of embarkation.” SAA’s Eskom turnaround strategy will include battery-operated candles, energysaving coal, renewable geysers, strategic firewood and illuminated darkness.

There will be electricity sufficiency by 2052 to coincide with the 400th anniversary of Jan van Riebeeck causing blackouts, bail-outs, EFF-outs and parliamentary procedure. Sufficiency will mean less consumption, not more electricity, thanks to falling demand as consumers, having forgotten why apartheid created the Eskom dinosaur, resort to hi-tech alternatives including candles, oil lamps, wood fires, crank handles, paraffin stoves and comptometers.

As ageing power stations, transmission lines and coal silos expire, the government’s new “war room” will bomb them. What African National Congress sabotage did not accomplish during the struggle, it will do as part of the solution. Under SAA management, as Eskom’s output drops 50% in 50 years, there will be ribbon-cutting ceremonies to celebrate “strategic decommissioning” of deceased power stations.

As Zuma has explained, the catastrophe is due to the apartheid regime building insufficient generating capacity. If you point out that it built too many power stations, three of which were “mothballed”, and that Eskom is selling less electricity now than then, you are deemed a racist.

Thanks to the government guaranteeing freedom to fail, free-market fundamentalists’ fantasies will be realised when Eskom gets perfect supply-demand equilibrium at market-clearing prices. In plain English, consumers cannot consume more than protected monopolies supply, which is likely to be very little for very long.

Louw is executive director of the Free Market Foundation.