The Organisation Undoing Tax Abuse (Outa) has filed a complaint with the Competition Commission requesting that Eskom be unbundled “due to monopolistic control and conduct of electricity supply and pricing in South Africa”.
Outa, a civic organisation that investigates tax abuse and corruption in the private and public sectors, has alleged that Eskom has engaged in uncompetitive behaviour .
“In order to protect the monopoly of its inefficient electricity generation division, Eskom has been engaged in various abuses of its monopoly position and exclusionary acts that deny its competitors access to the national grid,” Outa said in its submission to the commission.
The organisation is now asking that the commission separate Eskom into two corporations – one to be responsible for electrcity generation and the other to control transmission. Outa said both corporations should fall under the treasury.
Separating Eskom into two entities will open up competition, Outa said in a statement on Tuesday morning. “Outa believes that a separation of control over the arms of electricity generation and transmission will break Eskom’s stranglehold over the grid, thereby ensuring that open competition for energy generation at the lowest cost of production will reach the consumer, assuming political meddling is minimised which in itself may be a separate challenge.”
Following the release of the public protector’s “State of Capture” report and the Denton report, Eskom has been plagued by accounts of maladministration, wasteful expenditure and a lack of transparency. The Denton report itself – for which the power utility spent R20-million – was released earlier this month, but it was heavily redacted, leading to further mistrust of Eskom.
Outa is now suggesting that Eskom managers be fined and “held accountable for their abusive dominance”. The organisation said Eskom’s refusal to sign power purchase agreements with independent power producers appointed by the department of energy has allowed the power utility to protect its monopoly of the grid.
Outa has requested that the commission investigate its complaint and move the case to a tribunal.
The submission comes at a time when the Competition Commission said 17 local and international banks have, since 2007, colluded to rig the rand.