South African President Cyril Ramaphosa said power utility Eskom is currently facing major challenges and needs competition to be kept ‘on its toes’.
(African Stand) — President Cyril Ramaphosa, during a question and answer session with the South African National Editors’ Forum (Sanef) on Wednesday 9 September, said Eskom needs competition in order to be kept on its toes. As one would expect, the topic of corruption came up, as well as, the power utility struggling to prevent rolling blackouts, The South African reported.
‘WE’VE GOT TO ADDRESS THE ENERGY PROBLEM’ – RAMAPHOSA
Following a question about energy supply, Ramaphosa said the government has to address the energy crisis.
“We’ve agreed that there should be self-generation. And there’s a regulation that says it has to be licenced, now that is in our laws, in our regulations,” he said.
Ramaphosa said that while the government should be looking at a regulatory environment in Eskom’s best interest, he said it was agreed that there should be self-generation due to the power utility’s challenges.
“Then again we’ve also agreed that there should be competition, there should be the generation that will put Eskom on its toes so it is that regulatory environment that we need,” he said.
Another member of the media said the National Prosecuting Authority (NPA) said it doesn’t have the resources to fully execute its duties. This then brought Ramaphosa to the topic of State capacity. He said the capacity of the state, in terms of getting things done, should be the number one priority.
“As we now go into the recovery process, we are now going to focus more on implementation and it will be directed from the president’s office. The implementation must happen from a central point so that there is proper coordination and through that, we will be hoping to increase the capacity of the State because then we focus on our priorities, then we focus on what needs to be done,” he added.
ESKOM BATTLES HEFTY SHORTFALL
Apart from rolling blackouts and various stages of load shedding, Eskom has also cited a staggering shortfall of R350 billion. The power utility’s submission to the Standing Committee on Appropriations (SCOA) revealed some shocking figures on Wednesday 2 September.
According to the presentation, the power utility is suffering a shortfall of R350 billion based on the National Energy Regulator of South Africa (Nersa’s) tariff decisions, which means that South Africans may need to pay up.
According to Eskom, debt continues to grow despite price hikes, pointing to the fact that prices may need to be increased with a bit more vigour.
“The average price has increased five-fold whereas debt has grown by nearly 10-fold over the same window,” it said.
The World Bank undertook an analysis of electricity utilities in 39 countries in Sub-Saharan Africa (SSA). The analysis concluded that Eskom’s unit costs are very low relative to other SSA utilities — the third-lowest to be exact.