Outa calls for Eskom’s stranglehold over the grid to be broken
Organisation Undoing Tax Abuse wants the Competition Commission to fine and unbundle the utility due to its monopolistic behaviour
The Organisation Undoing Tax Abuse (Outa) lodged a complaint with the Competition Commission to seek its ruling and recommendation to both fine and unbundle Eskom, due to monopolistic control and conduct of electricity supply and pricing in SA.
Outa wanted the commission to investigate the possibility of breaking Eskom into two distinct corporations that separately control electricity generation and transmission, both owned by the state, the organisation said on Tuesday morning.
The separation of Eskom’s grid was originally the government’s policy, articulated in the Independent System and Market Operator (ISMO) bill drafted in 2004 and subsequently passed by Parliament.
"Hence Outa’s suggested request can be implemented once the president signs it into law," the organisation said.
"Eskom has steadfastly refused to follow ministerial determinations on the procurement of independent power, where Eskom’s management has unlawfully refused to sign power purchase agreements duly procured from the private sector by the Department of Energy. This conduct is presently preventing the investment of R58bn into energy generation projects to proceed and, as a consequence, the curbing of more than 13,000 construction jobs from commencing," Outa said in its statement.
Outa said it believed that a separation of control over the arms of electricity generation and transmission would break Eskom’s stranglehold over the grid, thereby ensuring that open competition for energy generation at the lowest cost of production would reach consumers, "assuming political meddling is minimised which in itself may be a separate challenge".