/ 27 January 2023

Editorial: Who is to blame for the Eskom crisis?

The debt relief package includes R184 billion in cash over the next three years and thereafter government’s take over of up to R70 billion of Eskom debt if it meets the conditions attached to the relief.
If there are no tariff hikes and no debt solution for Eskom, then just how does the power utility maintain its creaking infrastructure?

Who has to take ultimate accountability for the failure to recapitalise Eskom in the late 1990s to replace its old power stations and expand its generation capacity? The past few weeks have had us on edge about electricity and fingers are being pointed at actors in the struggles of the state-owned company and the still-nascent state of our renewables sector. 

There’s merit in the argument that maybe André de Ruyter isn’t the turnaround specialist that an institution such as Eskom needs. Criticism has also been fair that a miner-friendly Gwede Mantashe may not be the right person to sign off on reforms to the electricity market that would reduce a coal industry where he began his work in the National Union of Mineworkers in the 1980s.

But they are just two characters in a long cast of actors in the ruinous management of the energy market over the past 30 years. To put the blame on their shoulders or that of the department of public enterprises minister, Pravin Gordhan, and President Cyril Ramaphosa is a lazy assessment of the situation. 

In last week’s coverage of the electricity crisis we tried to earmark the key players responsible for the sorry state of Eskom. We’ve been rightfully criticised for leaving out certain people and others claim they shouldn’t have featured because they did the best for the ailing parastatal with what tools they had at their disposal. 

What we wished to expose was the fact that there’s no one single individual that is to blame, but rather the government’s approach since it was first warned in the mid-to-late 1990s that a crisis was inevitable.

The management of the electricity supply has been catastrophic. All our presidents, their finance, public enterprise and energy ministers along with the countless board members at Eskom over the years should be held accountable.

In 1994, we had a population of about 43 million with a GDP of about $153.5 billion. Today, there are about 60 million of us and our GDP is now valued more than $419 billion. 

This growth mainly happened on the back of coal-fired power stations in Mpumalanga that were built in the 1960s and 1970s. These plants have an average shelf life of 41 years, which could be extended to 60 years if maintained properly. 

Maintenance took a backseat because Eskom couldn’t raise tariffs to a level that would allow it to properly maintain its operations. The National Energy Regulator of South Africa has come under significant political pressure over the past 15 years from the ANC and opposition parties not to accede to Eskom’s requests. 

This week, Ramaphosa joined the opposition benches to call on Eskom not to raise tariffs — a populist play that his predecessor began. 

If there are no tariff hikes and no debt solution for Eskom, then just how does the power utility maintain its creaking infrastructure?

The hole is getting bigger.