Despair as government dithers on Eskom crisis

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For more than a decade, there has been little to indicate that South Africa’s growth story is destined to take a much happier turn. 

Long periods of listlessness have been punctuated by painful downturns and limp rallies, leaving little hope that the economy will ever be buoyant enough to undo the preceding period’s ravages. The longer growth has stagnated, the more difficult it has become to change course.

Playing no small part in this state of affairs is Eskom, which has become something of a totem of our collective despair. 

No one, it seems, is immune to the feeling of resignation that has accompanied our energy crisis — not even the utility’s board chair, Mpho Makwana, who recently suggested we could endure permanent stage two or three load-shedding for the next two years. Eskom quickly backpedalled, noting the proposal would not spare us from more intense blackouts. 

What the incident revealed is that there continues to be little agreement on how best to tackle this crisis. But, if this dithering persists, many more sacrifices lie ahead and any dreams of economy-saving growth will continue to be deferred.

Responding to the latest deluge of demoralising news relating to the beleaguered power utility, President Cyril Ramaphosa recently warned against short-term fixes. He underlined the importance of staying the course and pursuing the government’s “realistic”, though slow-going, solutions to the energy crisis. 

Ramaphosa’s interventions last week, including his decision to cancel a trip to the World Economic Forum in Davos, have stirred a sense of déjà vu, with the president intermittently mustering renewed urgency to tackle a situation that has long been deteriorating.

In his effort to ease discontent over the current blackouts, Ramaphosa also revealed he had asked Eskom to hold off on implementing its 18.65% tariff hike. Eskom was granted the increase to help cover its burgeoning debt, which has hamstrung its ability to maintain its ageing coal fleet.

Critics have pointed to Ramaphosa’s effort to stop Eskom from hiking tariffs as an example of him undermining those charged with balancing the utility’s interests and those of the public, including the National Energy Regulator of South Africa.

Energy expert Lungile Mashele asked in an interview: “Otherwise then why do we have the regulator? Why do we have the department of public enterprises as a shareholder? Why do we have the department of mineral resources and energy, if the president knows what he is doing?”

Complicating matters is the fact that, despite Ramaphosa’s administration scrambling to give the impression that it knows what it is doing, there has been little proof of this.

The government has been saying it has a plan to solve the energy crisis for some time now. However, whether these interventions will be seen through — whether they will actually make a difference or respond to our realities — remains to be seen.

Earlier this week, trade union federation Cosatu said the proposal to implement a permanent state of load-shedding would result in calamity. 

“This two-year proposed time frame is being thrown around by an institution that has not tabled a coherent and convincing road map on what they intend to do to drastically scale down electricity cuts just in the next six months,” the federation said.

“We are being forced to tolerate mediocrity or business as usual while we are facing a national emergency.”

Cosatu also pointed out that, in December 2020, it and other stakeholders adopted a social compact aimed at supporting Eskom and driving inclusive economic growth.

Despite signing the compact, Cosatu said, the government has continuously postponed the implementation of its key commitments. If there is indeed a plan for solving the energy crisis, why has so little come of it? 

Business Leadership South Africa has also raised this frustration. 

“Solutions will be proposed, perhaps some new ones adopted, but effective implementation remains out of reach and the crisis worsens by the day — as has been happening since the first bouts of loadshedding in 2007,” the organisation’s chief executive Busisiwe Mavuso wrote last week.

“Despite the need for more generation capacity being highlighted in the late 1990s, we have still not managed to add enough megawatts to the grid to meet demand.”

“There is a sense of despair,” Mavuso later wrote, “that we’re doing it all over again as solutions have been tabled time and time again.”

Eskom, and the fate of the country’s energy grid, have long been in something of a political vice grip. Given the fact that the utility is at the heart of the country’s economy, it is inevitable that it would also be vulnerable to many opposing interests.

These forces have played a part in Eskom’s drawn-out privatisation push, which has found expression in many different forms over the years, each of which have been a difficult sell in a social democracy.

The initial privatisation bid in the late 1980s resulted in the utility eventually being moved to the department of public enterprises, established to oversee the restructuring of the country’s state-owned entities in line with Thatcherist policy. 

The dilemmas arising from this decision — one of many political moves that have helped plunge Eskom into crisis — are still playing out today, as minister is pitted against minister in the fight over who gets to steer the utility. 

Meanwhile, Eskom has been pulled in two very different directions, on the one hand having to meet the demands of its corporatisation and serving the interests of an energy-hungry public on the other.

In the years since the utility’s move to the department of public enterprises, the country’s energy demands have grown, eventually outstripping supply, while Eskom’s tariffs have fallen in real terms. 

Alarm bells were sounded but were seemingly ignored until it was too late and the house was well and truly on fire.

Eskom has been in crisis mode since 2008 and it hasn’t helped that the government has not been responsive to this meltdown beyond politicians running interference to serve their own, narrow interests. With the utility’s course so unclear, it was inevitable that a type of paralysis would set in.

And then there is the governing party’s own ambivalence, a result of it straddling the thin line between its social democratic ideals and neoliberalism. If the party continues to create an Eskom in its own image, there is no hope of movement.

Sarah Smit is a Mail & Guardian business reporter.