The intentions are part of a resolution adopted by the African National Congress (ANC) at its national elective conference in December. The party had decided to evaluate and move SOEs to operate in specific economic sectors and be overseen by the relevant government departments.
Johannesburg - President Cyril Ramaphosa jumped into tackling the country’s electricity crisis with a daring plan for Eskom. The president revealed intentions to move the state-owned enterprise (SOE) to the Department of Mineral Resources and Energy’s (DMRE) portfolio from the Department of Public Enterprises during an address in Mangaung.
The intentions are part of a resolution adopted by the African National Congress (ANC) at its national elective conference in December. The party had decided to evaluate and move SOEs to operate in specific economic sectors and be overseen by the relevant government departments.
“It is a clear mandate from (the) conference,” Ramaphosa said. “The resolution will be implemented,” and the government will decide how and when it will be done.
Eskom’s energy crisis led the ANC-led government to wash its hands of its consistent issues of power supply, poor infrastructure and alleged corruption and sabotage. The country has been plunged into darkness following the power utility’s announcement of stage 6 power cuts until further notice.
Some analysts and politicians found that the proposal signalled a possible disbandment of the Department of Public Enterprises. They also saw it as a vote of no confidence in Minister Pravin Gordhan, whose boss may be losing confidence in his efforts to keep all SOEs afloat.
Those who have opposed the move since it was announced have cited DMRE’s Minister Gwede Mantashe’s potential oversight over Eskom as a conflict of interest, as the energy ministry is one of Eskom’s shareholders.
The Democratic Alliance (DA) and Economic Freedom Fighters (EFF) shared divisive opinions on the proposed move. The DA’s Ghaleb Cachalia expressed his disappointment describing it as influential as “engaging in superficial measures that are as effective as re-arranging deck chairs on the Titanic.”
“There is a clear and present danger that if this happens, Eskom will never be fully unbundled – as is necessary. Moreover, it will retain its dominant market position and the envisaged open power exchange and (the) market will not, in all probability be implemented,” Cachalia said.
“IPP procurements and private investment will slow even more, corruption in Eskom will flourish again, and we’ll have load-shedding in perpetuity. The failed utility will be shored up for continued looting instead of opening up the sector to private industry in the face of public market failure.”
The EFF’s spokesperson Sinawo Thambo said in a statement that while the party had long called for the disbandment of the Department of Public Enterprises and SOEs to be moved to their respective sectors, it said the move will not fix the power crisis.
“The failure to reconfigure government in line with developmental needs and the strategic role of state-owned companies has led to the collapse of Eskom,” Thambo said.
Further criticism over the move focused on Mantashe’s past remarks on outgoing Eskom CEO, André de Ruyter. Throughout 2022, Mantashe publicly criticised De Ruyter’s actions in trying to end the load-shedding crisis.
Last year, he said De Ruyter was acting “like a policeman” at Eskom.
He is also reported to have said that Eskom’s load shedding was now doing more harm to South Africa’s economy than had been perpetrated by state capture.
Professor Anton Eberhard, director of Power Futures Lab at the University of Cape Town’s Graduate School of Business, warned that the move to the DMRE would be a grave mistake by the ANC.
Eberhard said that apart from the energy ministry’s potential conflict, it could push private investment to the back burner and allow for corruption and load shedding to continue with no end shortly.