SA faces 'spectacular calamity' if Eskom fails: ANC proposes new SOE to challenge monopoly

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SACP and ANC leaders are seen during the SACP's 15th National Congress.
SACP and ANC leaders are seen during the SACP's 15th National Congress.
@SACP1921, Twitter
  • The ANC is considering a second state-owned power utility to challenge Eskom's monopoly.
  • President Cyril Ramaphosa announced this on Friday while delivering the ANC's message of support at the SACP's elective conference.
  • Mineral Resources and Energy Minister Gwede Mantashe confirmed that he had championed the call and that it was "receiving serious consideration".

President Cyril Ramaphosa says the ANC is strongly considering the establishment of a second state-owned power utility to reduce the risk posed by Eskom's failings.

Speaking on the third day of the SA Communist Party's elective conference in Boksburg, Gauteng, Ramaphosa said the proposal was initially made by Mineral Resources and Energy Minister Gwede Mantashe after Eskom plunged the country into stage 6 load shedding.

Ramaphosa said:

Our national [power] utility Eskom has not only been in a state of distress for the past three or four years. It has been in distress for easily 15 years. This has been because it has been operating according to a model that is no longer suited to the technology or the economic conditions of the present.

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"When you fly from OR Tambo [International Airport] to Cape Town at night and just look down at the splendour of the wonderful lights [of] our country… and if you sit back and you ask yourself, 'Where is this generated from?'. And then you reflect on the fact that it is generated by one company. One company, that if it fails becomes a spectacular calamity for the country, then you will realise that there is a pressing need for change," he said.

"This risk that we have, if you look at other countries like China, it has a number of state-owned electricity-generating companies that even compete among themselves, leading to prices going down. And that is the future that we should begin to imagine," said Ramaphosa.

He went on to propose that the country should consider reducing the risk posed by having only one power utility.

"The risk that the country could be exposed to… for much of its history, this model that we are pursuing has worked, but we are today experiencing a great risk in that we are placing the sole responsibility for electricity generation in one company. That is why comrade Gwede (Mantashe) flirted with the idea [of considering establishing] a second one (power utility) which can be owned by the state. I thought this was a great idea," said Ramaphosa.

He also lamented Eskom's ailing infrastructure, saying it posed a great risk and led to rolling blackouts over the past couple of weeks.

He said:

Because one company has been operating the electricity industry for the past 100 years, some of the problems have been that their power stations are more that 50 years old. I was saying to comrade Gwede the other day that when we started organising workers in the mining and electricity sectors in 1992, some of those power stations were already 20 to 30 years old, and that was 40 years ago. So, imagine those same stations now still pumping electricity.

Mantashe, who was also at the SACP conference, told News24 he had indeed suggested a second power utility and that it was "receiving serious considering".

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At its last meeting, the ANC's national executive committee (NEC) proposed a raft of changes in the government's day-to-day running of the ailing state-owned enterprise.

Calls were also made to speed up the establishment of alternative energy sources and accelerate the procurement of battery storage.

The NEC said the ANC-led government should speed up reforms in the energy sector, allowing for more power to be introduced into the national grid.

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