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Your editorial was right to be pessimistic about President Cyril Ramaphosa’s plans to fix the electricity sector (“The kink in the cable of Eskom’s debt”, August 1).
South Africans are used to fancy promises with no real drive behind implementing the solutions needed to address our problems. While some good ideas were buried in the president’s address, political reality gets in the way of hope.
Eskom does have a price problem. It has had since its creation in 1923, when it insisted on pricing electricity under its production costs. This created a precedent of unsustainably cheap electricity that has now led to a collapsing parastatal, and even higher prices in the long run to recover.
The solution is, of course, privatisation of the sector. Sell off Eskom assets and use profits to service the debt. Let the private sector produce electricity in fair and open competition with one another.
But this solution is unpalatable to ideologues in the government and trade unions. Not for any particular practical reason. Government would benefit from eliminating the Eskom thorn in its side. Trade unions would have even more employers to employ their members — and gain more members as the companies address unemployment.
Yet privatisation, and even the moves towards privatisation in Ramaphosa’s plan, will be opposed by those it would benefit. Because ideology says so. Not logic. Not reason, but the agendas of old books with no basis in reality.
Until such time as these ideologies are abandoned, Eskom and SA will continue to decline.
Nicholas Woode-Smith, Cape Town
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.