Centralised power plants in South Africa could disappear
In 2011, South Africa was regarded as being second only to China in terms of its renewable energy plans.
However, by the time previous president Jacob Zuma had been unceremoniously removed from power in November 2017, South Africa was lagging African nations like Kenya, Tanzania and Rwanda along with the Democratic Republic of the Congo, let alone China.
Entrenched interests inside the African National Congress, as well as the country's main unions, put paid to the forward thinking planning and by early 2019, blackouts had returned to haunt a country that was virtually shut down by power outages that began in earnest back in 2008.
As anti-corruption efforts ramp up in South Africa, much focus has been on the role of Eskom and its executive. As the Zondo Commission into State Capture continues, it is likely that significant security force and police action will lead ultimately to these embedded corrupt networks in State Owned Entities being exposed and individuals imprisoned.
President Cyril Ramaphosa gave notice of the actions that are being taken to fix Eskom during a debate in parliament after his State of the Nation Address.
“The unprecedented failure of Eskom’s generating capacity over the last few days underlines the severity of the challenges the company faces and the urgency of measures to address them," he said.
“There is a no single solution to the problems at Eskom – neither restructuring, nor refinancing, nor cost cutting, nor tariff increases, nor better plant maintenance on their own will have the necessary effect.
“We need to pursue all of these measures and more, simultaneously, in a coordinated manner, and with purpose, to turn the utility around,” he said.
The government is now planning to decentralise energy delivery which is part of a global move to allow communities to have more say over how their power is generated and distributed. The irony is that the renewable programme is planned with job creation as its core sales pitch to both unions and citizens at large.
At a media briefing in Pretoria on Sunday 24 February, Energy Minister Jeff Radebe confirmed that over 38000 jobs had already been created by what is known as the Renewable Energy Independent Power Producer Procurement Programme (REIPPP).
Government was on its way to ensuring renewables were mixed in to the overall energy plan in 2011 - before Zuma interceded and stopped the process.
“This means 38 701 people have had a full-time job for one year,” Energy Minister Jeff Radebe said.
While over R139 billion has reportedly been misspent by Eskom and its officials, the minister said local communities have benefited from over R1 billion invested by IPPs on education by up skilling teachers, providing extra teachers and classrooms, as well as awarding over 600 bursaries to students from disadvantaged communities.
Eskom Financial Situation as of November 2018.
While government is talking up the plan to ensure that local communities are uplifted by the renewable project, its opponents including the ANCs partner COSATU and unions like NUMSA are trying to stop the shift in power production from the apartheid-era Eskom central planning philosophy, to localised distribution.
That is a direct threat to unions in South Africa. According to Section 23 in the Constitution, every worker has the right to join a trade union and there are an estimated 3.1 million members representing around a quarter of the formal sector work force.
At the same time, Unions are supported by the Agency fee which is automatically deducted from employee salaries and paid to the respective union. Should Eskom lose workers, unions will lose money. During Jacob Zuma's tenure as president, the number of workers in Eskom rose by
The Zondo Commission into State Capture has heard evidence of how former President Zuma tried to force his own cabinet to accept a nuclear plan was was not discussed publicly, and was dropped on the country after the former president's mysterious trip to Russia in 2015. By the May 2015, Zuma had made four trips to Moscow in 10 months.
But the cosy relationship took a turn for the worse in April 2017 when the Cape High Court declared his plan to launch a Russian-backed nuclear plan for the country invalid. As the Zondo Commission has heard, the interference in large projects by the Gupta family and apparently Zuma himself saw Eskom front and centre.
The Cape High Court ruled that government's action had not just been irregular, it was illegal in a number of ways. First the government’s decision to go ahead with the nuclear build without seeking clarity on the details, along with the handing over of the project to Eskom without a proper procurement process.
Further, by requesting information from nuclear vendors, Eskom had acted illegally.
Also, venerable scientific institutions like the Council of Scientific and Industrial Research had concluded that nuclear would be far more expensive than either renewables or even coal in the future. Signing a possible long term $100 billion deal with Russia which Zuma had floated, would technically bankrupt the country and make it subservient to Moscow for decades to come.
Zuma's Gupta family links were highlighted at the time, and continue to be at the Zondo Commission. The family owned South Africa's only uranium mine, while Eskom's CEO in 2017, Brian Molefe, had a close relationship with the family.
It is this new freedom that is being fought by centralists who are rooted in 19th Century central planning methodology espoused by parties like the EFF.
But the government is fighting back against these, with promises that it will launch special tribunals to deal quickly with those who have used the State apparatus in order to commit fraud running into the billions of dollars.
“The energy sector is at the cusp of an exciting period," said Radebe "reminiscent of the huge changes brought about by rapid technological advancement in the mobile telephony industry in recent years. We need to be prepared for the disruptive times that the fourth industrial revolution will bring and adjust in a responsible way,” the minister said.
Eskom recovery plan - a lot of fixing required.
Finance Minister also announced during his Budget Speech in February 2019 that the three divisions of Eskom would be broken up in order to achieve economies of scale. At the moment Generation, Transmission and Distribution are part of the holding company and generates 95% of electricity used in South Africa. Unions have already declared they will strike if government follows through with their plan to break up the three divisions.
In October 2018 Mboweni pointed out that Eskom’s workforce was unsustainable and that at least 30 000 jobs needed to be shed in order to balance the books. There was an immediate backlash and Mboweni then announced in February 2019 that government was planning another bailout of Eskom that topped R69 billion, while top management numbers would be trimmed substantially.
ACTION AGAINST STATE LOOTERS
In what is seen as a related move made on 24 February, President Cyril Ramaphosa announced the establishment of a Special Tribunal to swiftly recover monies and assets lost by state institutions through irregular and corrupt means.
In a statement, the Presidency said they would move fast.
“Fast-tracking these matters through the Special Tribunal will enable the SIU to recover monies and or assets lost by state institutions through irregular and corrupt means; thus ensuring that those who are responsible for the loss of monies and or assets by state institutions are held accountable,” the Presidency said on Sunday.
The Special Tribunal will be led by Judge Gidfonia Mlindelwa Makhanya and will fast track the finalisation of matters that the Special Investigating Unit refers for civil litigation following the conclusion of their investigations for both public and private sectors persons and entities.
Those assisting Judge Makhanya will include Icantharuby Pillay, Johannes Eksteen, Selewe Peter Mothle Lebogang Modiba, Thina Siwendu, David van Zyl and Sirajudien Desa.