🔒 How world sees SA: Eskom may force Ramaphosa’s hand

South Africa’s electricity crisis is ultimately a spectacular failure of planning. Experts identified the problem well in advance, but the state failed to act in time to replace and maintain older power plants. South Africans did not take kindly to the renewed schedule of loadshedding imposed on them soon after the beginning of a new year and decade. They took to Twitter to voice their disapproval and in true SA fashion the jokes were rolling in about the loadshedding guy being back from his Christmas leave and that power cuts were like the debit order you forgot about. They were also severe in their criticism of President Cyril Ramaphosa who promised that there would be no loadshedding from 17th December to the 13th of January. André de Ruyter; Eskom’s new broom has been installed and an Eskom spokesperson said he met some of the Eskom staff over the public holidays and had been getting to know the business. De Ruyter has the unenviable task of turning around South Africa’s biggest problem and he has to contend with the unions who promised to make his life a misery if he goes ahead and split the power utility into the intended three units for generation, transmission and distribution. Palesa Morudu of Clarity Global Strategic Communications has analysed the situation at Eskom in the Washington Post and says that the dire situation at Eskom may force Ramaphosa’s hand who “stands accused of lacking the courage of his convictions.” – Linda van Tilburg

By Thulasizwe Sithole

The recent power cuts are not a first for South Africa; it is something that citizens have become accustomed to. But this time it was elevated to a new level when ‘an unprecedented 6,000MW was removed from the national grid’. It resulted in the shutdown of mines and factories while households went dark with no access to stoves, refrigerators or computers. It also led to a severe disrupted in cell phone communication. As a result, President Cyril Ramaphosa ended a state visit to Egypt prematurely to deal with the crisis.
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The Washington Post asks the question that comes to mind for many observers: “How is it that Africa’s most industrialised economy — with sophisticated financial markets, globally competitive universities, advanced hospitals and innovative information technology hubs — is no longer able to generate sufficient power to keep the lights on?” South Africa has been saddled with a crippled electricity supply for more than a decade. Loadshedding is the result of Eskom being in “perpetual crisis”. Its finances are in such a dire state and with its debt load at $31bn; it would fall into default if the government doesn’t keep on bailing it out.

The Post believes the risk that Eskom now poses to the country dates back to a 100 years ago. In 1919 at the end of the first World War; the country joined the rapid industrialisation of the rest of the world. It was also accompanied by the discovery of gold that “forced South Africans towards the cities and mines” and resulted in large-scale land dispossession. To sustain the rapid expansion of mining and rail transport; an electricity utility was created to ensure that mines would have a continuous, cheap supply of power. This was enabled through legislation in 1922.

This was the start of a state monopoly over power supply. Eskom was developed over decades and built several power plants using mainly coal as its source of power with some hydro and one nuclear plant in the mix. It developed a national power grid that remained the main source of electricity to business and white households at the time. At the end of the apartheid era and for the first decade thereafter; it was assumed that the country had one of the world’s cheapest and abundant sources of power. “And it was – until it wasn’t.”

The last of the fleet of power stations were built by the apartheid regime in the mid-80s, “ before international sanctions and Chase Manhattan Bank’s decision to call in its South African government debt put South Africa’s moribund economy under further pressure.” The country’s debt situation was one of the factors that forced the National Party government to the negotiating table. No new power stations were built until 2007 when surplus capacity had been run down. The ANC government then decided to allow Eskom to build “two massive new coal-fired plants.” The two power plants, Kusile and Medupi are supposed to deliver 9600 MW of power, but neither of them have been fully operational and are prone to problems and “dramatic equipment failures.”

The Washing Post says the failure of the two power stations could be attributed to overambitious planning or due to “plunder by a rent-seeking predatory class for more than a decade, it is hard to tell.” The Post highlights the case of Hitachi that was involved in paying Chancellor House millions to help with their bid for the plants for which they had to pay a $19m fine to the US Securities and Exchange Commission.

South Africa has started the process of acting on corruption at Medupi and Kusile and four people have been arrested on fraud and corruption charges and there could be more arrests in the future. But the Post attributes South Africa’s current electricity crisis ultimately to “a spectacular failure of planning.” Eskom’s Chief Operating Officer, Jan Oberholzer admitted that Eskom can only deliver about 70% of its capacity on a good day and it was operating without 40% of its capacity during the recent loadshedding episodes.

The country’s president Cyril Ramaphosa has repeatedly said that Eskom was too important to fail. The Post says, “a collapse of the power system would bury the country’s economic prospects and would likely precipitate severe social and political instability.” The plans to break up Eskom into three separate units with participation from the private sector has been met with resistance and will prove to be “easier said than done” as there are vested interests in Eskom and in the unions from which Ramaphosa gets his support. Despite resistance within the ANC, the programme to accelerate the participation of independent power producers who uses wind and solar energy has been speeded up and “has resulted in an estimated $4.7bn in private investment in the electricity sector.”

The Post says the blackouts have forced Ramaphosa’s hand who stands accused of lacking the courage of his convictions. “South African can hope there is some truth in the old saying: It is always darkest before the dawn.”