The ruling African National Congress (ANC) is considering forming a second state-owned power utility to challenge Eskom’s monopoly in the country. And despite the establishment of such an entity not being in the party’s discussion documents for its policy conference this weekend, it will be on the agenda.
This is according to ANC economic transformation chair Mmamoloko Kubayi, who said that she hopes ‘Eskom 2.0’ is accepted as a talking point among delegates and adopted by the conference.
Presenting at the South African Communist Party’s elective congress on Friday (15 July), president Cyril Ramaphosa said that the proposal for a second state-owned power utilty was originally made by Energy and Mineral Resources minister Gwede Mantashe after breakdowns at Eskom plunged the country into stage six load shedding.
“Eskom has been operating as a monopoly for over 100 years and having one company taking up the role of providing energy to the entire country poses a great risk. If it fails, its failure becomes a peculiar failure for the entire country,” he said at the time.
“Look at China. It has a number of state-owned power providers who compete among themselves ensuring that the price of electricity is greatly reduced.”
Mantashe later told the Sunday Times that a new second power generation company would fall under his department and generate electricity alongside Eskom with an entirely new power station build programme.
“What we are suggesting — it’s not a decision yet — is let’s have a second generation company of the state, and that generation company must focus on baseload, and there must be a build programme for power stations,” Mantashe said.
“We can’t allow power stations to only hear decommission, we must also have a build programme, and we think that if Eskom has no capacity, let’s start a second generation company.”
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Speaking to News24, Kubayi said that building a second state-owned power utility would go a long way in quelling discomfort within the ANC and leftists around Eskom and the apparent concessions to private companies encroaching on the energy sector.
“Within the ANC, the understanding is that the state must play a central role. And when a majority of ANC members feel that we are almost giving away state power to the private sector, there will be discomfort,” she said.
“President Ramaphosa announced the energy plan. While he was at the SACP conference, he spoke about Eskom 2.0, which workers and the left would be in favour of.”
Kubayi said that the ANC has a developmental mandate and that establishing a second state-owned power utility would ensure the party sticks to that mandate.
“We are saying let’s not abandon our developmental mandate and have an alternative company in the energy space to ensure we have security of supply.
“We are hoping that this conversation will be accepted. Obviously, it is not in the discussion document, and as we review the documents for the national conference this weekend we are hoping this is one of the issues that will be adopted,” she said.
In terms of funding the new entity, Kubayi said that the state has many SOEs, some of which are not a priority. Funding could be diverted from these, she said.
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