Logically, the government can no longer see Eskom as a desirable asset. This is obvious considering its operational failures, for which the government is blamed, and its ongoing demands on the Treasury, to which no end is in sight. The question now is: how do we fix it? Should it be broken up into smaller components, as planned? Or should it be kept as a single entity and placed within a different institutional context? What are the implications either way? Two arguments in favour of the unbundling option have been produced. The first: more narrowly focused activities would allow inefficiencies and the causes of operational failures to be more easily identified. Corrective action could then be taken. The second: restructuring would facilitate eventual privatisation, which would introduce competition and the profit motive into the industry. This would improve efficiency, resulting in lower tariffs, and relieve the government of responsibility for providing financial support.

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