By Solly Phetoe
Eskom’s development has been synonymous with South Africa’s economic growth over the past century. It is not an accident that Vanderbijlpark was named after the founder of Eskom, Hendrik van der Bijl.
He had been tasked by then prime minister Jan Smuts to establish what is today’s Eskom, and whose mandate was to roll out the electrification of the economy and society.
Needless to say, governments before 1994 viewed society and the economy as being limited to the interests of the white minority. Nonetheless Eskom grew and was the lifeline for Africa’s most industrialised economy, again one which ignored the needs of its African, coloured and Indian majority.
Eskom post-1994 was transformed from serving a minority to serving the nation. Governments led by the ANC rolled out electricity to the most impoverished communities.
We have moved from less than a third of households having access to electricity in 1994 to over 90% today. This is a remarkable feat that we should not forget.
The trials of Eskom during the dark decade of state capture are well-known. Eskom and other key organs were at the heart of the state capture assault on South Africa.
Billions were shifted from investment in maintenance and new generation capacity to the pockets of a few within and outside Eskom, some of whom later fled to Dubai, while others subject the nation to their inanities on X (formerly Twitter).
Eskom’s management became a merry-go-round with 10 CEOs in a decade. There was a deliberate breakdown in good governance and accountability. Corruption became the order of the day.
We have seen collusion between management at stations and coal suppliers to double invoice, coal trucks swopping high-grade for low-grade coal, plant management deliberately delaying maintenance to ensure parts break and can then be replaced at inflated costs. and actual sabotage to trip stations requiring the order of overpriced diesel.
The workers paid the price for these treasonous acts. Eskom workers have struggled to receive inflationary increases.
Workers in factories, farms, restaurants and shopping centres lost wages when productivity collapsed due to load shedding. Mineworkers faced retrenchments when minerals could not be mined.
Nurses, teachers, police officers and other public servants faced below-inflation increases as the fiscus was forced to spend billions keeping Eskom afloat and tax revenues declined due to the impact that load shedding had on businesses and workers.
During this period, the state spent significant resources on Eskom, in particular building Medupi and Kusile. Tragically these two did not escape internal and external corruption, resulting in delays and inflated costs leaving Eskom with an unsustainable R253 billion debt burden.
Society, too, has a role to play. Municipal debt owed to Eskom surpassed R60bn. Much of this is debt owed to municipalities by consumers totalling R280bn. Some may say this is due to poverty, yet we have seen state entities, departments, hotels, businesses, wealthy suburbs and even embassies among the culprits!
Eskom has battled criminal syndicates who have stolen thousands of kilometres of cable.
It would be natural for anyone to want to give up when facing such daunting challenges.
South Africa does not have that option. Eskom generates 95% of the country’s electricity and transmits and distributes with municipalities 100%. It is our most important economic asset. It is too big to fail.
Eskom and the National Electricity Regulator play a strategic role that the private sector could not fill, namely providing affordable electricity to all communities. It is too important a product to be left to unchecked profit.
January 2023 experienced the lowest point of load shedding, with 12 hours a day. We have, however, seen real progress in rebuilding Eskom since then, with load shedding reduced to less than two hours a day.
This has brought badly needed relief to working class families and the economy. We are not out of the woods yet as Eskom’s generation fleet remains stressed, but new generation and battery storage capacity are increasingly coming online. Much remains to be done.
The government responded positively to Cosatu’s call for R253bn debt relief for Eskom, enabling it to shift revenues to ramp up maintenance.
R1bn has been allocated to moving society to prepaid electricity meters to reduce unpaid debt to Eskom and ensure that it has the daily revenue it needs. Growing numbers of persons are being arrested and brought to court for cable theft and corruption. A new CEO with extensive experience has been appointed.
The National Assembly this week passed the Electricity Regulation Amendment Bill providing for the restructuring of Eskom into three entities under Eskom dealing with generation, transmission and distribution.
It will now head to the National Council of Provinces for consideration, though its passage before the May elections will be very tight.
Cosatu and its affiliates have differed with the government on Eskom’s unbundling. Workers fear that at worst it may lead to Eskom’s privatisation one day and place their jobs and wages at risk.
We fear it is an unnecessary ideological distraction that does not address Eskom’s fundamental challenges, namely weak management, crime and corruption, under-investment and ageing infrastructure.
We worry it may make coherent planning by Eskom of future generation, transmission and distribution investments messy and unco-ordinated.
Eskom was plunged into a crisis over the decade of state capture not because of its vertical structure, but because criminals were let loose.
We receive reports that criminal syndicates continue to plunder Eskom’s resources through manufactured maintenance breakdowns and inflated parts and diesel contracts.
While we differ on the bill, we applaud the real improvements over the past year that have given us hope that South Africa is turning the corner.
Cosatu and its affiliate, the National Union of Mineworkers (NUM), representing the majority of Eskom employees, will continue to work with Eskom and the government not only to restore the utility to its previous status as the economy’s anchor but also to help it transition to clean energy generation, to ensure workers at Eskom, the mining sector, value chains and host communities are not left behind and the Energy Transition is indeed a Just Energy Transition.
These are battles we cannot afford to walk away from.
Solly Phetoe is Cosatu’s general secretary.
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