Excerpts from interview with Hugo Kruger
“There is a reality that Eskom is under-performing, that is correct….
Government have not maintained the coal fleet for a very long time and now it seems to be that they are privatizing Eskom, this is privatization, they just say it isn’t, but it is how classical privatization happens . Without taking lessons from around the world, I regard this as a highly reckless move. Why? Zimbabwe unbundled once, they had to re-bundle after it was run into the ground. Lebanon did the same thing, Russia in the 1990s. There are so many failed examples of unbundling and I have not seen anyone from government, from Pravin Gordhan, Minister Mantashe, or the Minister of Electricity`s office, citing how they are going to create guardrails against what failed in other countries. And the World Bank`s literature on this is very clear, where it says no country that has successfully unbundled without security of supply has succeeded.
So we have load-shedding. The literature tells us unbundling when there is load-shedding causes chaos, and yet we are going full steam ahead with this thing!……
When you unbundle you accept private sector participation. Now theoretically you can still have Eskom generation competing against the private sector. We already have IPPs Independent Power Providers in South Africa.
Well, first of all they have never been independent power providers, the biggest one is the president`s brother-in-law, Patrice Motsepe and they are sub-contractors actually, they sell electricity on behalf of Eskom, they were brought in by the president`s other brother -in-law, Jeff Radebe when he was Minister of Energy….so when they say private sector and privatization they actually mean rent seeking for people affiliated with the ruling party.
The second point is Eskom generation has about 16GW, more or less, unplanned capacity loss. So it means one third of the coal fleet is broken down. Now if you accept private sector participation under those conditions , you have to accept competition and this will inevitable y lead to bankruptcy of Eskom generation because no company, imagine a car company with one third of cars broken down, how is that company not going to go bankrupt and be written off for scrap to private investors. And let`s be clear private investors are not a startup company, an entrepreneur with an idea, it is the president`s family.”
Source: Newzroom Afrika
Government ‘recklessly’ privatising Eskom – Kruger