Eskom and Business Leadership South Africa (BLSA) have been at each other’s throats for the better part of July, spilling into August over the fate of the power utility’s unbundling, particularly the ownership of its transmission assets.
The discord began in December when Eskom took the market by surprise when it announced a revised unbundling strategy which would have seen it retain ownership of the transmission business. Big business, under the banner of BLSA and Business Unity South Africa (Busa), felt blindsided by this announcement and quickly reacted.
BLSA and Busa dispatched a joint letter to President Cyril Ramaphosa ahead of this year’s state of the nation address (Sona) to come out clearly on what government policy is on Eskom’s unbundling.
The president duly obliged, using the Sona to emphasise that the government has not changed its position on the 2019 plans it outlined to unbundle Eskom into three units responsible for generation, distribution, and transmission.
This undertaking, followed by the work of the presidential task team that this month reaffirmed the government’s position that Eskom will not retain ownership of the transmission assets, has done little to rebuild trust between the utility and big business.
This tension of mistrust, particularly by big business towards Eskom’s intentions, was underscored by yet another scathing critique by BLSA CEO Busisiwe Mavuso in her weekly newsletter, published on Monday, which fell short of calling for a vote of no confidence in Eskom’s board.
“I do not have confidence the current Eskom leadership is genuinely committed to the success of these reforms. What I need to see is a board that talks of solutions rather than obstacles, that is actively engaged with lenders to chart a clear pathway and that approaches the complexity with the conviction that the outcome, a competitive electricity market with reliable, affordable power, is worth the effort. That is not what we are seeing,” Mavuso wrote.
Eskom chair Mteto Nyati has warned of financial ruin if the unbundling is botched or implemented at the pace the government is suggesting, with the utility preferring a phased approach in what is the biggest reform of South Africa’s energy sector in a generation.
The broken telephone between Eskom and big business needs to end. The public spat serves no purpose other than to generate headlines and inflame public debate.
The mishandling of the debate has created an impression that the fight is about those who advocated for privatisation and those who are anti-selling off of state assets. Both Eskom and BLSA know this is not what the unbundling process is about.
The time has come for Eskom and BLSA to come into the same room and discuss the matter outside the glare of the public and find common ground. The temptation to give up on negotiations and the ability to convince or be convinced are not in the culture of South Africa’s body politic.
The very foundations of this country are built on negotiating with people you might not see eye to eye with. This culture and tradition must not be lost to Eskom and BLSA at this critical juncture of South Africa’s reforms.
The Nyati-led board has done justice to South Africa by its sheer determination to rid the country of the scourge of load-shedding. This is no time to undo this progress by casting public aspersions on the board’s commitment to helping power the economy and be at the centre of the reforms. The onus is on the board to reach out to big business and be entirely transparent about its position. The time to open the dialogue is now.
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