Eskom unbundling plan complicates energy sector recovery
Reading of the latest plan for the unbundling of Eskom I have to ask why it appears the task team has selected the slowest, most complicated way of doing it (“Ramaphosa extends deadline for Eskom’s grid-split plan”, June 8).
First, the framework it was given, split into generation, transmission and distribution, already had one split too many. Separating distribution from transmission has always been nonsensical, and a further carve-out of renewable generation just adds to this madness.
Second, why is the government trying to separate the transmission assets from Eskom when it would be far simpler to unbundle the generating assets? The rationale behind Eskom unbundling is to allow the creation of an entity to operate publicly owned infrastructure that receives, transmits and distributes electricity throughout the country; this would then promote access to the grid for independent power producers (IPPs).
I agree that the transmission infrastructure should be publicly owned, but we already have an entity for this — Eskom SOC. Moreover, over the past 100 years of its existence, from the Electrical Supply Commission to the Eskom of today, it has acquired various properties, wayleaves and servitude rights on God alone knows how many properties, as well as other important legal rights.
Unlike a complex transmission network, a power station has an easily definable property boundary and an easily definable point of supply to the grid, so the simplest way of undertaking the unbundling is to carve out the generating assets (power stations) into a national generating company, which can then ― with IPPs ― contract to sell electricity to Eskom, which will retain ownership and responsibility for the national electrical grid.
Given that the Eskom liabilities, which seem to be the focus of this process, were mostly incurred for the construction of new generation capacity, these should be bundled into the balance sheet of the national generating company, where they belong.
Much work is needed on the details of the technical and commercial arrangements between these entities, but transferring the power-generating assets to another state-owned entity will at least advance the process, and the agreements developed could also be used as a basis for future IPP agreements.
Mark Townsend
Via email
Bad choices led to 2025, the annus horribilis of SA foreign policy
In critiquing my analysis of foreign policy, Michael Andisile Mayalo correctly asserts that “the real challenge for South Africa is to strengthen domestic productive capacity, expand exports, support local industry and improve competitiveness while maintaining broad international partnerships that create opportunities for growth” (“SA’s diplomatic strategy drives diversified global ties”, June 2).
That’s exactly my view and another way of saying foreign policy begins at home. Unfortunately, the government has failed on the domestic and foreign fronts. Domestically, the ANC has brought the country to its knees.
Initially, the opposite was true of foreign policy. After 1994 South Africa became a rising middle power with considerable global influence, particularly at the multilateral level. This was reflected in the country’s high growth rates until 2007. In 2010 South Africa joined Brics and foreign policy increasingly pivoted towards the eastern autocracies, alignment with Iran and increasing anti-Americanism. Former international relations & co-operation minister Maite Nkoana-Mashabane took pride in stating that foreign policy was guided by “ideological orientation”. Pragmatic consideration of the national interest was relegated to second place.
Contrary to what Mayalo contends, I don’t advocate choosing between the EU and China as trade partners but suggest that EU trade is more likely to push South Africa up the value chain, though this advantage is diminished by deindustrialisation and the economic damage wrought by the ANC. On September 9 2024, President Cyril Ramaphosa expressed concern about the “imbalance in the structure of our trade” with China, as South Africa exports mainly raw materials and imports “largely manufactured products” from China, which replicates the colonial pattern.
Instead of nonalignment South Africa chose sides, which in 2025 backfired spectacularly, the annus horribilis of South African foreign policy.
François Theron
Pretoria
Green magical thinking on energy has priced SA out of the market
Khulukani Mathe and Rosalind dos Santos’s article refers (“Government asleep behind the wheel as SA heads for imminent gas cliff”, June 9).
Unfortunately, led by green magical thinking on energy, South Africa has priced itself out of sectors where it might have been competitive. The impending decline of Sasol will just confirm that position.
Liquefied natural gas will be too expensive to compensate for the decline of Mozambican pipeline gas. And it’s now too late to think of starting serious domestic gas development.
Mike Muller
Via Business Day online
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