Eskom’s newly reappointed chairperson Dr Mteto Nyati is correct in having identified electricity affordability as a key priority for the Eskom board he will continue to lead for another three years.
He is also correct in having used the occasion of his reappointment to clear the air on the issue of Eskom’s restructuring, directly linking the unbundling of the transmission business from Eskom Holdings to the board’s new apex goal.
His view that competition and affordability are allies in the pursuit of efficiency at Eskom, which is, in turn, key to meeting the bigger objectives of universal access, economic growth and re-industrialisation, is as progressive as it is welcome.
It’s a stance that has also aligned Nyati with the reforms being pursued by government, following a period of genuine uncertainty as to whether he, the board and Eskom were truly willing partners.
To be sure, the unbundling of the National Transmission Company South Africa, with ownership and control of the transmission assets, has some way to run and there is still potential for resistance and backsliding.
However, Nyati’s public embrace of the model is helpful, as is the fact that the process is now being managed largely as a National Treasury project, soon to be supported by a professional transaction adviser.
Equally helpful is the fact that Electricity and Energy Minister Dr Kgosientsho Ramokgopa used the announcement of Nyati’s reappointment to outline the shareholder’s vision for what he called ‘Eskom 2.0’, and that this vision largely reinforced the need for Eskom to adapt to government policy rather than the other way around.
This is an important development, given that the reforms are geared towards addressing the risks associated with the prevailing monopoly model, including the potential for political interference, patronage, inefficiency and waste, as well as operational and financial unsustainability when a taxpayer backstop is available.
All these risks have been experienced by South Africans first-hand.
Where there is still a pressing need to clear the air, however, is in the area of Eskom’s environmental underperformance.
This came to the fore again recently, when the Supreme Court of Appeal found that Eskom and other State respondents had failed to take reasonable measures to address water pollution downstream of the Kusile power station in a matter brought before the courts by Topigs Norsvin. Eskom has been ordered to file a detailed remediation plan within 30 days of the ruling.
Then there is Eskom’s chronic breach of air pollution standards, which remains a deadly health burden for various communities, especially in Mpumalanga.
Power stations have continually missed legal deadlines to comply with their atmospheric emission licences, with several having been exempted until 2030. In the case of older stations, compliance has been entirely suspended until their scheduled closure in the same year.
A recent parliamentary hearing pointed to ongoing breaches, which should surely give the Eskom board pause before it approves any further delay to the decommissioning schedule.
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