Eskom death spiral: Where’s the restructuring?

This week, outgoing Eskom CEO Phakamani Hadebe informed a group of journalists, gathered to witness the spectacular train wreck that was Eskom’s financial results, that the utility was “facing a death spiral.”

This is a fair comment. Eskom makes far less money than it spends, and it doesn’t spend enough to keep making electricity. Without continuing infusions of taxpayer money, it cannot operate, and there is no path to breakeven ahead.

In this environment, one might expect the government to be pulling out all the stops to fix things. Instead, the newest appointments to run/restructure the company – Jabu Mabuza and Freeman Nomvalo – both already have other full-time jobs, which they will continue to pursue. They’re part-time hires at a time of full-time crisis. No one is really talking about Ramaphosa’s three-part restructuring anymore after the unions came out against it. Any hopes of progress seem stalled or abandoned, and the death spiral is only getting worse.

At the very least, the government should deregulate the market and let private players step in. They will steal customers from Eskom, but at least some South Africans will be able to keep their lights on.

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