Perhaps your usually sceptical correspondent is still basking in the afterglow of witnessing one the most spine-tingling renditions of Nkosi Sikelel iAfrika at Loftus. Perhaps it’s the hopeful tone of most conversations I am having with company executives in the aftermath of a barely predictable formation of government of national unity (GNU). Or it could be that Friday marked 100 days without load-shedding. It could also be the mini relief rally we’ve seen in SA Inc stocks on the JSE since late May.
In truth, it is probably all of these things that give me pause to reflect on what Ninety One value manager John Biccard once said to me about confidence and conviction. It takes something like 100 data points to change a person’s convictions for better or worse. Turning around the collapsing SA narrative was always going to require sustained evidence of improvement. And while there is some way to go, in electricity at least, many are starting to believe an end to load-shedding is indeed near. But is that borne out by the data?
A hundred days without load-shedding is cause for cautious celebration. I note that former Reserve Bank deputy governor Kuben Naidoo told delegates at the Operation Vulindlela conference that his personal view is that “half of the reason we don’t have load-shedding is because the mining sector is in a deep recession”.
I recently had the opportunity to sit down with Rudi Dicks, head of the project management office in the private office of the president and head of Operation Vulindlela, to unpack the programme’s achievements so far and what to expect from its second phase. The diverse composition of the new cabinet will require careful management, but it also brings a broader base of support for the structural reform agenda. Operation Vulindlela’s ability to operate effectively without becoming entangled in political dynamics has been a key factor in its success, and this will remain crucial moving forward.
Dicks, who has an extensive background in economic policy and labour research, assured me that the president’s full political backing remains steadfast. “This is the president’s programme,” he emphasised. “Structural reforms as a mechanism to unlock economic growth, dealing with the network sectors, are fundamental and important.” The commitment to speeding up reforms and introducing new ones is clear, as Operation Vulindlela aims to keep the momentum going.
Dicks acknowledged the 100-day milestone but cautioned that Operation Vulindlela wants to be confident that there will “not be any load-shedding ever again”.
The National Transmission Company of SA officially came into being on July 1, creating the competitive market envisaged in the 1998 white paper on electricity market reform, but Dicks said there’s still lots of work to be done “to create markets and the market code, for example, to procure on a competitive basis is going to be important”.
He elaborated on the complexity of the energy sector reforms: “Remember, all we’ve had for more than 100 years is a vertically integrated electricity market where Eskom was running everything from generation to transmission and distribution. This is complex, right? We’re kind of 20 years behind what globally has happened. So you’d have to support various players in the markets, including the regulator, for example, to be able to understand how we move to a competitive market.”
Dicks emphasised the ongoing nature of these reforms. “We still need additional generation. We’re not completely out of the woods. We need to ensure that we facilitate private generation. More importantly, this is the next part of what we think is going to be quite critical in our conversations is EDI, which is basically the electricity distribution industry and the reform of that.”
When questioned about Eskom pursuing generation projects that flout Treasury’s loan conditions, Dicks was slightly more circumspect, saying Eskom is having “a conversation” with the Treasury about that. Which is code for saying Eskom wants to alter the Treasury loan scheme conditions. Perhaps it’s using the 100 days card as a carrot.
While I can understand the need for Eskom to paint a picture of what the future might look like internally to its over 39,000 employees, the secrecy of this approach does raise concerns. Among the purposes of Operation Vulindlela is to reduce “the costs of doing business” in SA. Yet across the road Eskom has put in an application to energy regulator Nersa for a 37% increase in electricity tariffs in 2025. This is in tandem with the restructuring of the tariff formula (peak and off-peak, and so on), which will have additional cost consequences for small businesses and consumers.
Obviously, Eskom is unlikely to get the full request granted. And Nersa has since rescinded its approval, made in December, of the so-called electricity price determination methodology rules, which were proposed for implementation in 2025/26 as a replacement for the prevailing multiyear price determination methodology for setting tariffs. But it highlights again how policies and projects can risk working at cross-purposes. And at a time when a GNU would want to start showing positive outcomes.
Meanwhile, Operation Vulindlela will continue working on electricity distribution and how to create the enabling environment for a 1,500km transmission build programme. While challenges remain, it would be churlish not to acknowledge the exemplary achievements of Operation Vulindlela. Yet it’s still only 30-odd data points down and another 70 to go before we turn doubters into believers.
• Avery, a financial journalist and broadcaster, produces BDTV’s ‘Business Watch’. Contact him at badger@businesslive.co.za.
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