Eskom – Government should be an enabler, not a barrier

Image by Steve Buissinne from Pixabay

It is now time for the government to stop underplaying the situation at Eskom and instead start taking action by no longer being an obstacle to solving the electricity crisis but rather an enabler.

“The government blames corruption, state capture and now also the private sector for load shedding and the electricity crisis. In the meantime, the government appeases all role players with various promises and initiatives, but nothing comes of this,” says Rudolph Janse van Rensburg, portfolio analyst at Everest Wealth.

In last week’s court ruling on load shedding, it was not only confirmed that it violates several constitutional human rights but also that there is uncertainty regarding the content and timelines of the government’s energy plan. This comes amid ongoing phase 6 load shedding and talk of even higher phases and a difficult winter ahead.

The government encourages households and businesses to launch power projects and calls on the private sector and investors to intervene but then makes it extremely difficult with its policies, legislation, regulations and red tape.

“It is time for the government to really enable other actors to step in by providing clarity, removing barriers and implementing its ideas and plans. Those who can, become as independent from Eskom as possible whilst the private sector does intervene with new power projects to encourage private power generation.”

Meanwhile, conflicting statements and promises about when load-shedding might come to an end and the extension of coal-fired power stations’ lifetimes as well as reports of infighting between ministers and questions about the electricity minister’s powers leads to more political uncertainty that deters investors.

“If the government doesn’t get its own house in order and starts speaking with one voice, it will continue to scare away investors. This requires robust policy and a transparent legislative framework that will instill confidence among investors and give the private sector the opportunity to do even more in order to solve the electricity crisis.”

Dues not only cause unprecedented inconvenience but have a huge impact on the economy. Business profits are now burdened by increased costs and hampered job creation, economic growth and investment.

“The government must show that something is actually being done about the problems such as corruption, poor maintenance and repairs and the protection of infrastructure. There must be tangible outcomes from the energy plan as well as evidence of progress being made,” says Janse van Rensburg.

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