Privatising ESKOM

By Christiaan van Huyssteen (@cvh23)

From iAfrica:

The government is reportedly considering roping in private-sector capital to cover struggling power utility Eskom’s R225-billion funding shortfall.

“There has been serious public speculation about public-sector equity injection, assets being sold, private-sector equity and tariff hikes,” Reuters quoted Public Enterprises Minister Lynne Brown as saying.

“These are levers which must be considered in any serious discussion.”


Privatisation has this stigma of being a means whereby public assets is sold off at knock down prices to a bunch of greedy corrupt businessmen who are somehow going to use their new investment to enrich themselves and exploit the poor. That is what the likes of COSATU, the SACP, and the EFF would have you believe.

This could not be further from the truth as long as the privatisation is done transparently.

ESKOM has not shown profits in many moons, they require tax payer bailouts every so often, their new power plants are far behind schedule, and prices are rising all the time, hitting the poor the hardest. A free market approach wouldn’t allow any of this.

Maybe it is time for a radically different approach?

Any private enterprise is inherently much more efficient for two reasons: accountability and politics.

Private business aren’t subject to interference by politicians who are more likely than not, untrained to run a businesses, and very seldom have any technical expertise in their department. When last was a successful business person or an electrical engineer minister of energy or public works? Appointments to leadership positions in public enterprises are based on politics, and not necessarily on competence.

Accountability is another issue. A private business has shareholders, and if executives aren’t performing, heads roll. Shareholders care about their financial interests, and will also ensure the best qualified person for a particular job is appointed. In government however, there is very little accountability. The taxpayers don’t have a say on how their money should be spent. Voters have no say, they vote once every five years and that’s where their say in the matter stops. Not even consumers have a say, because, as with most government businesses, ESKOM has a monopoly over the market.

We can’t go on like this. A structurally refreshed ESKOM will benefit all involved.


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4 thoughts on “Privatising ESKOM

  1. Great article but I must disagree with you on one point:voters do have a say apart from the voting booth,people must inform themselves on issues that affect them and then put pressure on officials,no government official would dare go against the wishes of a populace if they knew that those people were constantly and consistently monitoring their perfomance based on a previously given mandate.The problem we have in south africa is that of apathy.


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