Eskom state of disaster warning

Energy analyst Chris Yelland and trade union Solidarity have warned that the planned national state of disaster over the ongoing power crisis can result in widespread fraud and corruption.

President Cyril Ramaphosa said a national state of disaster, similar to what the government did during the Covid-19 pandemic, is planned to address the energy crisis.

The government is already busy establishing whether the legal requirements for declaring a state of disaster are met.

It is also investigating which powers a state of disaster will provide to resolve load-shedding urgently.

ANC secretary-general, Fikile Mbalula, said the plan would require reprioritising the pressured national budget.

Mbalula said a state of disaster would help to end load-shedding quicker because it would allow the government to speed up procurement and the reallocation of resources.

The plan to respond to the growing energy crisis and problems at Eskom includes:

1. Prioritisation of maintenance, management, and security of Eskom power plants.
2. Management of load-shedding such that it minimises the impact on the economy and the provision of basic services, including water.
3. Mitigation of the decision by the National Energy Regulator of South Africa (NERSA) regarding Eskom tariffs on people and the economy.
4. Implementation of measures to manage electricity demand, including the installation of solar heaters and panels and other energy-efficient systems, which should be incentivised.
5. Expediting of the procurement of emergency power.
6. Relief and support to poor households as well as small and medium-sized enterprises.
7. Curb the outward migration of technical and management skills and capabilities at Eskom, whilst mobilising further skills in areas such as engineering.
8. Support of the Just Energy Transition Plan (JETP) as a long-term programme.

The plan and suggestions sound good on paper, but many stakeholders warned that the state of disaster opens the door to large-scale corruption and fraud.

Yelland said that implementing a national state of disaster over Eskom load-shedding could spell bad news if it is used to facilitate the wrong decisions.

“When I suggested a state of disaster eight months ago, I had in mind to facilitate and expedite the right decisions, and I proposed what those right decisions were,” he said.

“But, I fear, eight months later, that the state of emergency or disaster may be used to facilitate and expedite the wrong decisions and actions.”

Yelland said the Covid-19 state of disaster facilitated widespread fraud and corruption, which can happen again this time.

Another concern is the timing. “A big concern is that the state of disaster is not driven by concerns towards South Africa and the effects of load-shedding,” he said.

“My concern is that it is more driven by ANC politics in the face of the looming elections next year. In other words, the real disaster driving this for the ANC is the impact on its party and not the country.”

These concerns are shared by Solidarity, which highlighted that government incompetence led to the energy crisis.

Solidarity argues that it is insane to trust the government with the powers of a state of disaster when their mismanagement caused the disaster.

Connie Mulder, head of the Solidarity research institute, said there are benefits linked to the declaration of a state of disaster.

However, the chances that such benefits will materialise are extremely small, while the risks can be destructive.

Mulder said the state of disaster creates the nasty possibility of a corruption crossover between Medupi, Kusile, and Covid-19 purchase fraud.

“Although it seems tempting to be able to apply faster decision-making, the reality is that emergency procurement of energy will take time,” he said.

“A state of disaster is not going to significantly accelerate this process. It will simply relax the overview thereof.”

One concern is that the government will push through a long-term deal with Karpowership, which is tainted by corruption allegations.

Mineral Resources and Energy Minister Gwede Mantashe previously pushed for a 20-year contract with Karpowership at a cost of over R200 billion.

Last month, Mantashe said cutting the proposed contract period to 10 years could help government realise its ambitions to procure energy urgently from Karpowership.

However, the deal faces numerous hurdles, including environmental challenges and Outa legally challenging Karpowership’s generation licences.

Outa highlighted that power ships are an emergency solution during war or after a natural disaster. It is not meant as a permanent, two-decade electricity provider.