LETTER: Dinosaur Eskom must be divided into two entities
Splitting the utility into a grid-owning unit and a generating entity will encourage competition and make power cheaper
Eskom is a dinosaur that needs to be broken up and dismantled. It is in financial crisis, with billions in losses, bloated staff, rampant interest payments and ballooning debt that could hit R600bn. The DA’s Ismo bill, or “cheaper energy bill”, aims to break up Eskom into a transmission- and grid-owning entity, known as the Independent System Management Operator (Ismo), and a generating entity, Eskom. Eskom will then compete with independent power producers (IPPs) on price and reliability for supply to the grid. Eskom can be privatised in part or full over time once divorced from the grid. Metropolitan municipalities with a proven history of good financial governance and electricity management will be allowed to trade with electricity generators directly, buying electricity from the source. The governance of Ismo will be a blend of private and public representation, which will provide further credibility and reduce potential state corruption. The bill will thus allow competition amo...
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