Fixing Eskom: A chance to kickstart the mining industry and the economy

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Government has identified the challenges it faces and it has put in place a plan to turn Eskom around. There are some encouraging signs, but it remains to be seen whether government has the political will to push through with reforms, writes Owen Murphy

Hardly a day goes past without the status of our electricity grid being in the news, often for the wrong reasons.

The solvency of Eskom has also become a factor in the international ratings agencies downgrading South Africa’s sovereign ratings, given that the government has guaranteed the repayment of a large proportion of Eskom’s debt to its lenders. Government is currently the dominant figure in the energy supply market through its control of the regulatory framework, its ownership of the dominant energy producer, and its ability to make management appointments at Eskom.There are some encouraging signs that government is taking some steps in the right direction.

We understand that the thinking behind this is that it will allow the units to be streamlined somewhat, and to allow for a degree of privatisation going forward, although this has not been publicly stated. There has been some positive reaction to the plan, notably from the Council for Scientific and Industrial Research which has commented as follows:

It remains to be seen whether the government has the political will to push through with the reforms that it has identified.

 

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I don't believe it does. Already the wrong noises are emanating from the echo of the trough. I had some hope watching CyrilRamaphosa in Kimberley. Since that day his behaviour has reverted to looter extraordinaire

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