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Stage 6 load shedding in South Africa spells bad news for the country’s economy

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Picture: Armand Hough/African News Agency (ANA) – Customers of Ferhan Cellular store in Sea Point, Cape Town are helped by employees with flashlights during Stage 4 of loadshedding.

By Professor Bonke Dumisa

On June 28, Eskom CEO Andre de Ruyter held a special media briefing where he mentioned that Eskom could be forced to move South Africa to Stage 6 from as early as 4 pm that afternoon. Moving to Stage 6 means businesses and ordinary households could face load shedding of as long as four hours at a time. This is destroying the economy; it was therefore not surprising that the rand immediately weakened from around R15.83 against the US dollar on June 28 to about R16.26 the day after the announcement and commencement of the Stage 6 load shedding.

He mentioned that at least 10 operating units had been lost overnight, resulting in unplanned losses of at least 14204 megawatts. He then mentioned that the unprotected Eskom workers’ strike was also contributing significantly to these load-shedding problems.

At that time, he mentioned that the striking workers had been intimidating many other employees to join the strike and stay at home. He also accused the striking workers of blocking roads, preventing the delivery of coal, and stopping other employees from accessing their workplaces. It was reported that there were many alleged cases of striking workers harassing and/or subjecting non-striking workers to criminal attacks like petrol bombing their houses, non-striking workers slashing the tyres of a car. Some Eskom employees have been accused of deliberately sabotaging Eskom installations.

There are criminal cases which have been reported, on an ongoing basis of corrupt Eskom employees colluding with some corrupt Eskom service providers to defraud Eskom. This includes, inter alia, cases where service providers have been paid for services not rendered, including one case of the service provider being paid for diesel not delivered.

Research shows that Eskom employees are ranked among the most highly paid in South Africa, not just in the public sector but against most workers in the private sector. The question to be asked then is: Will these workers ever stop holding the country to ransom by sabotaging their own employers whenever they want to get things their own way?

These are employees who have been demanding double-digit salary increments from an employer with debts close to half a trillion rand.

This shows that to effectively address all Eskom problems, a multi-pronged approach must be adopted, especially because it is clear that there are many stakeholders within and externally who benefit from the many problems that Eskom continuously faces. However, for this to be achieved, there must be a political will to really completely resolve the Eskom problem once and for all.

On the generation side, there must be outside people to be seconded to Eskom to establish exactly why certain power stations are having recurring problems; and how such problems can be finally resolved. If need be, capital expenditure allocations need to be made to permanently sort out these problems, ensuring that the service providers suspected of corruption are not given the work to correct what they messed up in the first place. Issues of maintenance also need to be addressed; it does not make sense that every time serious maintenance has to be carried out, such maintenance cannot be done without serious disruptions to electricity generation.

Eskom has complained about the high level of electricity theft throughout the country, though more prevalent in some areas as opposed to others. Is there any political will to seriously address this issue? There are two dimensions to this, internally and externally. Internally, how does Eskom address the allegations that there are many Eskom employees who are actually involved in both illegal electricity connections and reconnections? How does Eskom effectively root out this corruption? Externally, there are many cases of Eskom employees and Eskom contractors who are harassed and even killed by the communities when they are trying to disconnect all these illegal connections.

When will the government show that they want to effectively address the issue of electricity theft once and for all by ensuring that those who are expected to root out electricity theft are adequately protected on an ongoing basis? There are also municipalities and government departments that have been accused of being either defaulters or even non-payers on their electricity bills. What is the government doing to root out these tendencies by other arms of government?

There must be external people appointed to vet the full Eskom service provider database to ensure that all the people and entities that are paid are actual legitimate recipients of Eskom payments. Is there any political will to deal with this, bearing in mind that there are many vested interests here, including political involvement in such shenanigans? Government monopolies are never good for any country.

The time has come for significant private sector involvement in both electricity generation and electricity distribution. This may help reduce the vulnerability of South Africans to self-serving Eskom employees and service providers.

Dumisa is an independent economic analyst