Ramaphosa: Load shedding a 'hugely damaging reality check'

South African President Cyril Ramaphosa looks on as he delivers his annual State of the Nation address, in the South African Parliament, on February 7, 2019, in Cape Town. (RODGER BOSCH/AFP/Getty Images)
South African President Cyril Ramaphosa looks on as he delivers his annual State of the Nation address, in the South African Parliament, on February 7, 2019, in Cape Town. (RODGER BOSCH/AFP/Getty Images)

The re-emergence of load shedding is a "hugely, damaging reality check" of the crisis at Eskom, President Cyril Ramaphosa said.

The president was replying to members of Parliament who had raised issues on Eskom's crisis earlier this week in the state of the nation address debate.

On Thursday Ramaphosa said the "unprecedented failure" of Eskom's generation capacity over the last few days underlines the "severity of challenges" at the company and the "urgency of measures" needed to address them.

Last week, Ramaphosa announced that Eskom would be split into three entities - generation, transmission and distribution – and that government would support the balance sheet of the debt-laden power utility. The latter's details will be revealed by Finance Minister Tito Mboweni when he delivers the National Budget on February 20.

MPs however have criticised the president for his comments that he was "shocked" to learn that Eskom has started implementing load shedding again. The power utility on Sunday implemented load shedding for the first time since February, blaming it on technical issues at power stations.

In response the president has said that there is "no single solution" for the problems of Eskom.

"There is no one silver bullet. Neither will restructuring, nor refinancing, nor cost cutting, nor tariff increasing, nor better plant maintenance ... have a necessary effect [on their own].

"We need to pursue all these measures and more – simultaneously in coordinated fashion and with purpose turn the utility around and we will turn it around," he said.

No privatisation

The president clarified that the unbundling was not "privatisation" as the three entities will be "100% state-owned".

He also clarified that steps to turnaround the entity must be inclusive and determined through a consultative process with stakeholders.

"We have not done enough to bring key stakeholders such as labour on board on various aspects of this matter but we are determined to correct this. As social partners and stakeholders, we have a common interest to find sustainable solutions to crisis at Eskom," he said.

The president added he has been talking to labour and informed them they will engage on the matter in the next few days.

Further to Eskom's challenges, Ramaphosa said that the finance minister will provide details on how to stabilise its finances. He also said that cost cutting in the form of retrenchments would be a last resort.

He said that the restructuring would reduce the risks associated with a "massive" Eskom and is needed to ensure security of electricity supply.

"The breakdown of six units immediately takes out 4000 MW and has an overarching impact on the SA economy and the lives of our people - this happens because we have all our eggs in one basket

"Restructuring will align Eskom with international electricity trends," he said.

The restructure will ensure better regulatory oversight, increased competition and minimise risks.

"Restructuring won't solve Eskom's problems immediately but would ensure Eskom can meet its energy needs in future, he explained.

Public Enterprises Minister Pravin Gordhan on Wednesday defended the president when he briefed the portfolio committee on public enterprises on the issues at Eskom. Gordhan said that the president was probably expressing his "despair".

Ramaphosa told the National Assembly he had constituted a special Cabinet committee on Eskom, to be led by Deputy president David Mabuza, and includes Public Enterprises Minister Pravin Gordhan, Transport Minister Blade Nzimande, Energy minister Jeff Radebe, finance Minister Tito Mboweni as well as the State Security Agency to provide daily feedback to the president on actions to secure energy supply.

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