The 'power crisis' in cabinet that has taken SA to the brink

13 December 2014 - 22:26
By S’thembiso Msomi

Whether it calls it a crisis or not, the ANC needs to act fast on the country’s energy crunch, writes S’thembiso Msomi, and the first step is choosing a course of action

The cabinet may be wary of using the word, but it tacitly admitted through its actions this week that South Africa has a power crisis.

In the days before the Wednesday cabinet meeting, Eskom executives, ANC spokespeople and even ministers were at pains to convince all and sundry that there is no crisis - despite the entire country being subjected to power cuts.

ANC MP Dipuo Letsatsi-Duba, chairwoman of parliament's public enterprises committee, told a colleague that even though her private business had suffered because of power outages, she still believed there was no crisis.

"A crisis to me or any other reasonable person will mean a complete shutdown of energy in the country and we're not anywhere near that," Letsatsi-Duba said.

But at a post-cabinet media briefing on Thursday, it was clear that ministers believed Eskom to be in crisis mode.

They announced a "technical team war room" composed of senior officials from the departments of energy, co-operative governance and traditional affairs, public enterprises and three others to help the power utility keep the lights on.

"This forum will include technical officials, relevant experts, including international experts, and the private sector, where necessary," said Energy Minister Tina Joemat-Pettersson.

The cabinet also appointed Deputy President Cyril Ramaphosa to oversee the turnaround strategy for Eskom and two other troubled state-owned entities, SAA and the South African Post Office.

Now, you do not take such drastic measures unless you believe you have a crisis on your hands.

In his state of the nation address in June, soon after his re-election, President Jacob Zuma singled out energy security as one of his new administration's priorities.

The government needed "to respond decisively to the country's energy constraints in order to create a conducive environment for growth", Zuma said.

But until the Eskom situation had escalated into a crisis, wreaking havoc in the economy and leaving millions of citizens fuming, there was no evidence of a renewed sense of urgency on the part of Zuma's administration.

Instead, renewed political fighting in and outside the ruling party over mooted plans to sell off some of Eskom's power stations to raise money took centre stage.

Government ministers in favour of the move argue that the parastatal needs to sell some of its assets to keep afloat and help introduce private sector players in the industry.

But opponents of the proposed measure reject it as a move by what they call the remnants of "the 1996 class project" in Zuma's cabinet who want to reintroduce the much-maligned "privatisation through the back door".

The "1996 class project" is a reference to government ministers, senior civil servants and ANC cadres who supported "neoliberal" economic policies pursued during Thabo Mbeki's tenure as president.

Cosatu has been the most vocal in rejecting the proposed sale.

"This is a continuation of an agenda started in the late 1990s, when government scaled down investment in the electricity sector with the hope that the private sector would invest in it," the labour federation said in a statement issued by its spokesman, Patrick Craven.

"All this clearly indicates that the 1996 class project agenda has not been exorcised completely. This calls for maximum vigilance by progressive forces."

Cosatu may be weakened, but it has strong backers within the ANC and its alliance on this issue.

These include the chairman of parliament's portfolio committee on energy, Fikile Majola, who recently said the proposed partial privatisation ran contrary "to the ANC's agenda of building a developmental state".

Politics and ideological differences, especially at the ruling party level, have always been among the greatest hindrances to government implementing a coherent and effective strategy for Eskom.

From the outset, the power utility was seen as a strategic entity by the ANC, one that its government would use to deliver on its promise to provide electricity to all who were denied under apartheid.

When Nelson Mandela became the first president of a democratic South Africa, only 5.2million households had access to electricity. Today, 20 years later, more than 12million households are connected.

By the end of the '90s, powerful forces within the ruling party had begun pushing for the parastatal to be broken up and sold off.

However, there was no real appetite from potential buyers as players complained that electricity here was "too cheap" and therefore the profits were likely to be marginal.

But key policy-makers and decision-makers in the government still believed that partial privatisation was the answer and in 1998 refused to invest in new power stations despite warnings from the then minerals and energy ministry that lack of sufficient capacity would mean a collapse the system by 2007.

By 2002, the pro-privatisation group was forced to abandon its plans as Cosatu and other "leftist" groupings in the ANC convinced delegates at the party's national conference of that year to support more direct involvement of the state in the economy.

However, this ideological shift arrived too late for Eskom and the decision not to invest in a new power station soon caught up with the parastatal.

The country had a taste of what was to come when, in December 2005, the Koeberg power station was damaged, resulting in power cuts across the Western Cape and parts of the Northern Cape.

The situation had worsened by 2007, providing more ammunition to Mbeki's political foes, who laid the blame for power cuts at his door, because he had championed privatisation.

As the ANC prepared for its Polokwane conference, where he was to be ousted by Zuma as party president, Mbeki publicly admitted that "we were wrong" in refusing to give Eskom the resources it needed to build more capacity.

But Eskom's troubles have not subsided in the post-Mbeki era.

Instead of energy security being treated with the same kind of urgency that was shown during the preparations for the 2010 Soccer World Cup, important projects such as the new Medupi power station were allowed to suffer one delay after the other.

Eskom executives continued to get lucrative "performance bonuses" even as they failed to keep the lights on.

Perhaps the "war room" will change all that and set the power utility on a new path.

But without the political decisiveness of those in charge of the government, this "war room" too is doomed to fail.