In the thick of the mayhem, as we are right now, it’s likely that we haven’t had time to understand just how much our world has changed in the past week.
It’s a slightly annoying adage that a week is a long time in politics, but just look at the evidence. Since Tuesday last week former Eskom CEO André De Ruyter has given an explosive interview on corruption at Eskom and its links to a minister in cabinet and other senior ANC officials. At the same time, catastrophic stage 6 load-shedding settled in as a permanent feature of life.
De Ruyter was swiftly and unceremoniously booted out of the utility after a hastily convened Eskom board meeting that the public enterprises minister insists he had nothing to do with. Never before have we seen such decisive speed in the energy crisis.
To keep us busy we also learnt on Friday that because SA’s criminal justice system has been so damaged by state capture we have landed on the Financial Action Task Force’s greylist, despite the post-state capture National Treasury’s best efforts. This makes the country less investable.
Amid all of this, on Wednesday the finance minister presented his budget, a document that in my view amounts to an accelerant thrown liberally onto this highly volatile mix.
Enoch Godongwana’s budget is radical in the context of our time. It shows that the Treasury wants Eskom to get out of the power generation business, and that it thinks the state should not have any business there. It envisages the country working with international funders to transition out of coal to renewables over time.
The budget foresees the private sector building new renewable generation with international funding, and Godongwana wants to “concession” the old coal plants in Mpumalanga to private operators for what remains of their lives. The budget even suggests public-private partnerships should prevail in distribution.
I don’t think one needs to look too hard to find reasons why the minister is right. It is plain to see that our state-owned companies have either failed, or are busy failing. While a sensible country might have a functioning post office, national airline and arms manufacturing company, the things we actually can’t live without are electricity and railways.
It is to our great and lasting cost that it is here, on this critical terrain, that the ANC’s ideological battle royale and the contestation between the utterly corrupt and the somewhat less corrupt, and the old ideological contest between state and private ownership, will play out.
The swift and withering blowback for De Ruyter reveals a lot, principally because it’s not really about him. He has “touched a live wire” as a friend said the other day. He is merely a conductor of the shock.
De Ruyter did express some irrelevant political views. I don’t think that was wise, as they will be used to argue that he was ideologically against the ANC from the outset. But one factor in all of the analysis of his interview has been dismissed; it is so very South African that we forget that just three months ago somebody tried to kill him with cyanide.
De Ruyter must be furious, and now not only going in to bat for his reputation but also likely highly motivated to hit back at those he feels are responsible. It is unlikely that we have heard the last from him.
The criticism has been sharp. Public enterprises minister Pravin Gordhan said De Ruyter failed to “sweat” the Mpumalanga coal fleet, and that he instead “swanned around the world looking at renewables”. That’s interesting in the context of what De Ruyter alleges — that it is those very coal plants that have been trashed by criminal syndicates linked to those in the ANC’s senior leadership.
Gordhan’s comments also put the $8.5bn “just energy transition” deal with foreign funders into question. Is there any real appetite for this without De Ruyter?
Gwede Mantashe, a long-time advocate of coal power who has previously accused De Ruyter of treason, attacked him again, challenging him to name names. Inevitably, ANC secretary-general Fikile Mbalula weighed in. SA Revenue Service commissioner Edward Kieswetter pulled no punches either, saying De Ruyter had “accepted that plant performance would not improve”. I think the commissioner is absolutely correct on that score — but probably for different reasons to his.
With a privatising reformer in the Treasury keen to get out of electricity generation, a coal enthusiast in the mineral resources & energy ministry, the country’s greatest exponent of state ownership at public enterprises, and a rapidly unravelling story about corruption of a simply devastating scale in the heart of the ANC government, the lines are drawn. This will get uglier, because the stakes couldn’t be higher.
By the time you read this it is possible that the president will have reshuffled his cabinet. The consensus among ANC watchers is that if and when he does, neither Gordhan, Mantashe nor Godongwana will be moved. My fear is that the president will design a cabinet that is fatally flawed, ideologically at war with itself, destined for internal strife over how to proceed with the energy crisis, and vulnerable to what is winding up to be the country’s biggest corruption scandal yet.
The simplest solution for the president to avoid all of this is to remove the relevant ministers from government, but he is hardly known for decisive action. I fear we are entering a critically difficult and dangerous time.
• Parker is Business Day editor-in-chief.
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