Neels Blom’s parting shot on how we might fix Eskom
Abitter truth is sinking in: Eskom wants more money and we the people are going to give it to the failing state-owned power utility. First it will be a R100bn or so to fund the interest on debt it cannot repay, and then hundreds of billions more if SA is going to continue as anything remotely resembling a modern state.
It is not as though we have the cash lying around, but it will be found and most likely through loan sharks that will see the nation indebted beyond any hope of economic development. Still, prudent little citizen investors should be doing their sums before submitting to the inevitable co-option, if only to maintain an illusion of honour.
But before we get to that, there is a little matter of semantics. Jabu Mabuza, the Eskom board chair, may have intended to inspire citizen cooperation by urging them to take responsibility for “putting us back in a sustainable way”. By that he means South Africans are all to blame for the catastrophic venality and incompetence that passes for management at the stateowned enterprises (SOEs), including and especially Eskom.
This would be reasonable if only because the nation has no choice but to co-operate if it wants electricity. But taking responsibility by agreeing to help fix a problem is not the same as accepting blame for causing the problem.
Mabuza wants the money, and he wants the nation to give it freely and to tacitly agree to Eskom continuing to do business the way it has always done business as an arrogant and dismissive bully.
Eskom and its succession of shareholder representatives (the ministers in the ANC government) are to blame for the blackouts, no-one else. The citizens on to whom Mabuza wants to shift the blame are Eskom’s long-suffering paying customers. Mabuza, as perpetrator representative, is blaming his victims.
Which brings us to what we must do. The first thing is to take a hard look at Eskom’s assets. Its power stations, including the hugely expensive and half-built Kusile and Medupi, are steadily being written off, as is the way with all capital goods. That means unless Eskom continues to build new generating capacity, it will soon have no capacity to speak of. And unless the state nationalises the coal mines, the plants will have no fuel for heating its kettles. This means its national grid will be worthless, just like every other tangible thing in that ivory tower of despair that is Eskom.
As Mabuza says, asset sales are not an option, because the “only assets we can sell, no one will buy”.
But it does have one asset and perhaps it is for sale. Eskom owns the right created by state monopoly capital to generate and distribute electricity. This is the only reason Eskom continues to exist. None of the causes for Eskom’s failure enumerated by public enterprises minister Pravin Gordhan and Mabuza are attributable to the sometimes onerous developmental imperatives imposed on SOEs, while all of it refers to venality and incompetence. These are grounds for termination at any organisation anywhere, parastatal or private.
Eskom’s terrible legacy is that it is too big and too risky to sell intact, or even as separate generating and distribution entities. Yet, this is what we must do. The most likely success would be to break up distribution into short-distance, low-friction regional and district network operators that are free to buy electricity from anyone with a solar panel.
We’ll fund it, and pay off Eskom’s debt, by auctioning off the rights to generate and distribute locally. With our lot in charge, regulation is a cinch.
It does mean, though, that Eskom and the politicians who control it must accept blame for screwing up SA’s power supply.