Eskom and case against privatisation
Amandla Compilation | 12 March 2019
To prevent Eskom’s looming bankruptcy, unbundling of the power utility has been put forward by government as strategic intervention to save the utility. But this proposal to break up Eskom into three separate parts – generation, transmission and distribution – seems merely to be code for privatisation. Unbundling is no end in itself; it is simply a means to promote greater involvement of the private sector. The real question becomes the extent of privatisation of the utility, whether this process will be partial or complete.
The latest budget delivered by finance minister, Tito Mboweni, is a clear signal of a significant shift in orientation towards privatisation. Talk of radical economic transformation, or radical measures to address inequality, have rapidly been replaced with measures aimed at appeasing the credit rating agencies – the budget is blatantly business oriented and aimed at attracting foreign investment at all costs.
The proposed strategy to unbundle Eskom is the clearest expression of this. It seeks to make electricity and its provision a commodity rather than a basic human right and service to the public. But this process has and will not go unchallenged, it has already been met with resistance from certain prominent trade unions and other non-governmental organisations.
Below, we have pulled together a number of articles that explore these issues and explain the case against the privatisation of the utility:
- Jeff Rudin: The struggle to socialise Eskom
- Dick Forslund: Putting Eskom’s debt on the government balance sheet could lead to another credit downgrade and disastrous budget austerity
- Sean Sweeney: Unbundling Eskom is code for privatisation
- AIDC: Statement on Budget Day
- Carilee Osborne and Michael Nassen Smith: Era of unbridled faith in the virtues of the market is now over in Business Day
- Lavinia Steinfort: How to finance our future
- Amandla Forum: Seminar on the role of public utility in energy sector [podcast]
The two “Koms”
Telkom v Eskom
Regrettably the article is full of populist sloganeering and not much intellectual depth.
It would be useful to see why the basket case that Telkom was is now so successful while Eskom with huge government bailouts that should have been used to provide essential public goods such as education and health needs further bailouts.
Since the dawn of democracy Eskom has been a huge burden to SA’s development and has nothing to do with neo-liberal philosophy. Bad planning that was common in the former soviet states has plagued Eskom. The lack and cost of power in SA is costing us our development.
Alternative paths must be explored – too big to fail – cannot be an option. Unfortunately, Heterdox thinking offers no viable solutions to SA’s power question, although it may or other sectors.
“Too big to fail” Eskom must be broken up