Minister Pravin Gordhan – Eskom won’t be privatised
Public Enterprises Minister Pravin Gordhan has dismissed rumours that privatisation was on the cards for Eskom.
The assurance was also given by President Cyril Ramaphosa earlier this year.
Gordhan was delivering the utility’s special paper that detailed plans to fundamentally restructure the struggling state-owned enterprise.
There’d been speculation that the cash-strapped utility would be sold to the private sector to keep it afloat.
Gordhan disputed this and has confirmed that government would be separating the entity’s transmission, generation and distribution components to become subsidiaries of Eskom Holdings.
The minister insisted there was a future for Eskom.
“There are some narratives around privatisation and so on, which is part of the fake news industry as far as we are concerned. I have given you a clear articulation of where we stand on each of the processes that we are involved in.”
The minister said that the special paper concentrated on the transition from the existing dependence on fossil fuels to the mix of energy sources.
“And this plan indicates the kind of energy mix that South Africa foresees for itself in the next 10 years. In other words, how much hydro, nuclear or renewables or solar, coal and any other form of energy that could contribute to the energy mix in South Africa.”
He focused on the formation of a transmission entity.
“The transmission component will be separated firstly as a functional subsidiary of Eskom Holdings.”
Gordhan said that consideration was also being given to create two or more generation subsidiaries to introduce competition with Eskom.
Gordan said Eskom could not continue as is and must adopt a new business model.
Gordhan said monopolies such as Eskom were wasteful and did not think outside of themselves.
He said to curb this, its generation component must be split to create internal competition.
“Each cluster will act as a business and that business must produce power as cost-effectively as possible so that you as consumers get the lowest possible price as possible.”
He said over time, new public and private generators would enter the market as well as the integrated resource plan.
“Monopolies by their nature are an extravagant cost. So, we’ve got to change the monopoly culture and monopoly pricing.”
Generation as a subsidiary will become independently responsible for its operations and outcomes and its performance will be evaluated separately.
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Source – EWN
