Eskom: Ramaphosa’s keenest test yet
Cyril Ramaphosa’s state of the nation address last week suggested a return to policies past. The biggest throwback — and the one most likely to bite — is a revival of Thabo Mbeki’s plan to restructure Eskom
About a decade ago — before "state capture" and "corruption" engulfed SA’s political lexicon — "1996 class project" was the phrase du jour. Back then, the expression — used derisively to describe the economic policy of the administration of former president Thabo Mbeki — became a rallying cry for the Left, which played a crucial role in ousting Mbeki at the ANC’s Polokwane conference in 2007.
It was a rallying cry that catapulted Jacob Zuma into the presidency.
Now, the "1996 class project" seems to be making a comeback, with President Cyril Ramaphosa in his second state of the nation address last Thursday trying to repackage old policies to set SA on a new path.
From his plan to split intelligence into domestic and international components, to his announcement of a directorate within the prosecuting authority to focus on state capture, Ramaphosa is turning back the clock to move SA into the future.
Undoubtedly the biggest and most urgent throwback concerns the restructuring of Eskom. It was, after all, under the Mbeki presidency that the government mooted the possibility of splitting Eskom into three to turn it into a more sustainable business. But in the aftermath of his ousting, even his best-laid plans collapsed under the corruptible weight of Zuma’s ANC.
What we thought we defeated in Polokwane — the 1996 class project — has resurfaced and has [reared] its ugly headDumisani Dakile
That party is now Ramaphosa’s ANC.
Already, there are noises from the erstwhile Zuma faction opposing any plan to restructure Eskom — which, ironically, buckled under the corruption and mismanagement of their patron’s watch.
But the loudest opposition comes from Ramaphosa’s own constituency — those who were first out of the blocks to support him in his quest for the ANC presidency. The Left, predictably, has been most vocal in its disapproval of the reforms the president has proposed after "nine lost years" under Zuma.
On Monday, Cosatu in Gauteng threatened to push the trade union federation to reconsider its support of the ANC in the May elections. This followed a similar threat last week by the Highveld branch of the National Union of Mineworkers (NUM), the Cosatu-affiliated union’s largest region.
In a media briefing on Monday, Cosatu’s Gauteng provincial secretary, Dumisani Dakile, raged against the unbundling of Eskom, as well as the return to prominence of former finance minister Trevor Manuel and the appointment of former SA Reserve Bank governor Tito Mboweni as finance minister.
SA has suffered yet another day of consecutive power cuts caused by major problems at the main energy supplier Eskom.
Manuel and Mboweni were key political figures during Mbeki’s presidency.
"What we thought we defeated in Polokwane — the 1996 class project — has resurfaced and has [reared] its ugly head. The role played by Trevor Manuel [shows this]; he was a serious soldier of the 1996 class project … The appointment of Tito Mboweni as finance minister is part of that," Dakile said.
"The question of the unbundling is not a new debate; we thought we had resolved it. It feels like déjà vu."
Cosatu is set to embark on a national strike this week, which Dakile said would launch resistance against job losses and "other antidevelopmental state tendencies".
The National Union of Metalworkers of SA (Numsa), which organises workers alongside the NUM at Eskom, said it would "defend" the power utility in the streets.
Numsa’s Irvin Jim said the unbundling of Eskom marks the first step toward privatisation. "The rationale … has not been explained to us. It sounds ideologically just like the liberalisation and privatisation of the Thatcher and Reagan era," he said.
The union said the state has declared war on the working class, and is punishing workers for two decades of "rampant mismanagement, looting and corruption".
Unions are vocal now that the cat is out of the bag. But the ANC resolved on unbundling Eskom at its January lekgotla. And before this, the task team assigned to extricate the power utility from its financial crisis held a meeting with union leaders to bring them on board.
What it means
The plan to restructure Eskom has drawn the ire of the country’s trade unions
The FM understands the unionists who attended the meeting were mostly from the mining sector, and were hardly clued up on Eskom. Numsa did not attend the meeting at all.
While unions reacted negatively to Ramaphosa’s proposals, Moody’s was also not convinced. The ratings agency says the plan to split Eskom will do little to address the company’s financial difficulties.
"The move paves the way for a more transparent group with more clearly allocated revenue and cost between business segments. However, in and of itself it does little to address Eskom’s financial challenges."
It says Eskom remains a significant risk to SA’s fiscal position.
The utility is unable to service its R419bn debt from the revenue it earns. It is also battling to keep the lights on due to poor maintenance and substandard construction on its Medupi and Kusile power stations.
The ANC, in its lekgotla resolution on Eskom, which the FM has seen, said: "Eskom is bankrupt, which presents a serious threat not only to government, but to the economy as a whole. Incurring more debt is no longer an option."
The Eskom question is set to become Ramaphosa’s keenest test.
Amid the politicking, the true extent of the crisis hit home on Monday, when Eskom implemented stage 4 load-shedding. It was a sobering reminder of the need to find a solution to SA’s energy crisis — and fast.
It was also grim proof that the nine years under Zuma were not, in fact, merely lost; rather, the destruction wrought in those years is all but complete.