Break up Eskom to break corruption

To break the hold of criminal syndicates on Eskom, the utility must be successfully broken up despite delays in its unbundling process. 

This is according to Mark Swilling, Professor at Stellenbosch University’s Centre for Sustainability Transitions, who told Newzroom Afrika that while sabotage has reduced at Eskom, it is still a major problem. 

Swilling said Electricity Minister Kgosientsho Ramokgopa’s focus on corruption and sabotage at Eskom has resulted in fewer occurrences of crime at Eskom’s power stations. 

However, the reduction in sabotage is predominantly due to former Eskom CEO Andre de Ruyter’s spotlight on organised crime at the utility. 

This forced the criminal syndicates to scale back their operations, said Swilling. 

“Although Andre de Ruyter suffered the consequences of going up against organised crime at Eskom, some good has come of it in the form of attention on the issue, which has spurred action.”

However, the problem has not gone away, with criminal syndicates still operating at Eskom and contributing to the load-shedding the country is experiencing. 

While the problem will not be solved overnight or easily, breaking up Eskom into three separate companies will disrupt the syndicates’ operations. 

“It is absolutely essential that Eskom is broken up so that we can break the hold of the criminal syndicates on the current vertically integrated institution,” said Swilling. 

Eskom has made progress in unbundling its transmission and distribution divisions. However, it has been painstakingly slow. 

The idea of unbundling the utility was first mooted 25 years ago in a 1998 White Paper on the Energy Policy of the Republic of South Africa.

This is part of the Eskom Roadmap published in 2019, which outlined the unbundling of the utility into three separate businesses under the umbrella of Eskom Holdings. 

Eskom is set to be split into a generation company responsible for producing electricity, a transmission company that will transmit electricity and a distribution company that will distribute electricity to consumers. 

The transmission company will eventually become a fully independent state-owned company outside Eskom with a separate balance sheet.

Significant progress has been made in this regard, with Nersa recently granting the New Transmission Company of South Africa a transmission facilities license.

However, these have been met with opposition from the Mineral Resources and Energy Minister, Gwede Mantashe, and other ANC members. 

This may result in the passing of the Amendment Bill potentially being delayed until after the 2024 elections.

There is speculation that the deliberate delay by Mantashe relates to ideological antipathy by sections of the ANC towards the unbundling of Eskom.

They see it as a form of privatisation, which also explains his reluctance to facilitate the expansion of private power generation.

Mantashe is committed to coal-fired power stations and has dragged his feet in expediting the introduction of independent power producers.

Swilling said there is a fear that the amendments will weaken the state’s electricity monopoly in South Africa by enabling outright competition to Eskom’s generation division.