In a recent oped Eskom CEO Dan Marokane attempted to dress up a significant policy retreat as a “pragmatic” evolution. He argues that keeping the National Transmission Company South Africa (NTCSA) as a subsidiary of Eskom Holdings is the only way to protect a fragile balance sheet and avoid triggering lender default (“Eskom on a mission to lower electricity costs amid reform”, January 30).
To the uninitiated this seems like sound corporate stewardship. To those of us who have spent years fighting to break the back of the state’s energy monopoly, it is a transparent attempt to gaslight the South African public.
Let’s be blunt: what Marokane is proposing is not the unbundling South Africa was promised. It is a shell game. It is a “fake unbundling” designed to keep the referee in the same jersey and on the same payroll as the star player.
For decades the single greatest bottleneck to our energy security has been the vertical integration of Eskom. When one entity owns the power stations, the pylons and the wires, it has every incentive to protect its own inefficient coal fleet by blocking cheaper, private competitors.
The Electricity Regulation Amendment Act (ERAA), which came into effect just months ago, was supposed to be the death knell for this conflict of interest. It was supposed to create an independent Transmission System Operator (TSO) that would act as an impartial gatekeeper.
Instead, Eskom leadership is pivoting to a model where the TSO is merely a department in a larger, Eskom-controlled bureaucracy. This is a structural sabotage of our future.
Marokane claims a ‘clean break’ would jeopardise debt stability. The reality is the opposite
The most immediate casualty of this “pragmatism” is the Grid Access Unit (GAU). This unit is the engine room of the energy transition — the office that decides which private projects get to plug into the national grid. By keeping the GAU inside an Eskom subsidiary, the government is handing the keys to the transition back to the very entity that has a vested interest in slowing it down.
As University of Cape Town professor Anton Eberhard has rightly noted, “creditors won’t allow it” has become a convenient shield for Eskom — a handbrake used to stall the deep structural reforms our economy desperately needs.
The financial argument for this subsidiary model is equally hollow, especially when one considers Eskom’s track record. Over the past 15 years South African taxpayers have been forced to pump nearly R500bn in bailouts into this failing utility.
We have in effect paid for Eskom several times over, only to be told now that we cannot have a clean break because the “balance sheet is too fragile”. This is an insult to every citizen who has watched their taxes disappear into the black hole of Eskom’s debt while their lights stayed off.
Marokane claims a “clean break” would jeopardise debt stability. The reality is the opposite. South Africa needs R440bn to expand the grid by 2030. We need 14,000km of new transmission lines to unlock private investment. A subsidiary of a junk-status holding company cannot raise that capital.
No rational investor will provide low-cost finance to a “ring-fenced” entity that is still legally anchored to Eskom’s R200bn-plus legacy debt. By refusing to let go of the assets, Eskom is ensuring the TSO remains a financial hostage, unable to fund the very infrastructure we need to survive.
The choice is simple: we either build a modern, transparent energy market or we continue to protect a failing monopoly until the lights go out for good
Furthermore, this backsliding puts $8.3bn (R150bn) in international just energy transition partnership funding at risk. Our global partners are not blind; they see this “phased approach” for what it is: a move to protect the status quo. If this funding vanishes because Eskom lacks the courage to reform, taxpayers will again be left to foot the bill.
Marokane and electricity and energy minister Kgosientsho Ramokgopa may argue they are following the “letter of the law” in the ERAA. They are technically correct that the Act doesn’t explicitly forbid a subsidiary during a transition, but they are violating the spirit of the law. The ERAA was not passed to facilitate a rebranding of the Eskom monopoly; it was passed to dismantle it.
The DA has already submitted a series of hard-hitting parliamentary questions to force the minister to disclose the legal and financial advice that supposedly makes full unbundling “impossible”. We want to see the specific lender clauses. We want to see the risk assessments. Because right now, “lender consent” looks less like a hurdle and more like an all-purpose excuse for reform drift.
South Africans are tired of half-hearted reforms and bottomless bailouts. We have seen what happens when the state tries to be both the provider and the regulator. The results are clear: the highest electricity prices in our history and a grid on life support.
We need a “clean break” — a totally independent transmission company that owns its assets, manages its own debt and operates a fair marketplace. Ramokgopa needs to show Eskom that he doesn’t bow to their every whim.
The choice is simple: we either build a modern, transparent energy market or we continue to protect a failing monopoly until the lights go out for good. The DA chooses the future. It’s time the CEO and the minister did the same.
• Mileham is a DA MP and spokesperson on electricity & energy
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