Privatise Eskom? Never, says Gordhan, but private sector won't be left in the dark

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Members of Parliament on Thursday debated the privatisation of Eskom. Photo: Getty Images
Members of Parliament on Thursday debated the privatisation of Eskom. Photo: Getty Images

  • Public Enterprises Minister Pravin Gordhan says government's agenda is not to privatise Eskom.
  • During a debate in Parliament, Gordhan highlighted that the power utility's transformation will echo throughout the energy sector.
  • The future Eskom will remain state-owned, but there will be room for private sector players within the energy sector.

Government has no intention to privatise power utility Eskom, said Public Enterprises Minister Pravin Gordhan.

The minister was addressing a debate on the privatisation of Eskom during a mini-plenary session of the National Assembly on Thursday.

"There is much work to be done to reposition and revitalise Eskom after the tragic damage that has been done by state capture," he said. "Let me make it clear, right at the outset - Eskom is not being privatised," he told members of Parliament.

Gordhan said that there are "no secrets" in government's agenda when it comes to Eskom. However, private sector participation in the energy space is part of government's agenda, he explained. He used an example of rooftop solar systems being installed by households as a form of private sector participation. In particular, poorer households can have solar panel rooftops installed with the aim of electrifying their homes, and then selling excess power to Eskom so that they can earn incomes too.

The minister said that ensuring energy security is vital for the well-being of the country – and that it must happen within the context of climate change commitments such as reducing carbon emissions. For this reason, there must be "an appropriate balance" between renewables and fossil fuel-based power. Additionally there must be a just transition for workers and communities affected by changes in energy production.

Government's agenda involves securing additional energy from both Eskom and private players – the latter's energy production capacity however cannot dwarf that of Eskom, he said. It is also a priority of government to ensure the legislative and regulatory reform required to support change, and to restructure power stations and systems to meet climate change requirements.

"Given its systemic nature – Eskom's transformation will accelerate reform in the energy sector more broadly," Gordhan said.

Load shedding 'regrettable'

Gordhan admitted that the recent bout of load shedding was regrettable. But government has been in touch with the board and has been assured that steps are being taken to ensure necessary repairs are taking place. "We fully accept the current performance of the plant is unacceptable for South Africa," he said.

Gordhan said that apart from securing more generation capacity such as harnessing resources such as wind and solar, government is also working to ensure the financial stability of the entity and that investments yield returns - particularly the two major power stations Medupi and Kusile.

He added that the restructure of Eskom into three entities - generation, transmission and distribution - will result in a power system SA can be proud of. "There is abundant proof there is a clear programme ahead to resolve the issue of spare energy capacity, to ensure the balance sheet of Eskom is repaired ..." he said.

Some key issues to be tackled include having cost-reflective tariffs and dealing with municipal debt. An "active partnership model" between Eskom and four municipalities is underway to ensure debt is collected over a period of time, he said.

Opposition weighs in on privatisation

During the debate, DA MP Ghaleb Cachalia, however, put forward that privatisation or rather "popular capitalism" is needed in the energy sector. He called for a wider ownership of shares, the curtailment of the power of unions and the prevention of groups from acquiring "state apparatus" to create a "preferential economic base for themselves". He suggested that if Eskom is privatised its social value would prove higher than if it remains state owned. "Time for discussion is now, instead of stumbling from blackout to blackout, from one debt crisis to another," he added.

IFP MP Elphas Buthelezi pointed out that millions of South Africans were without electricity due to load shedding as a debate on Eskom's privatisation is under way. "Can we afford not to privatise Eskom? Is Eskom itself not the biggest threat to our energy security?" he asked.

"One day of load shedding in a developing economy is one day too many," he added.

EFF MP Omphile Moatwe said that the DA and ANC were no different and that the governing party intended to privatise Eskom by forcing it to collapse. Moatwe suggested terms like "unbundling"" or "separation" was a ruse for privatisation.

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