{"id":59635,"date":"2024-01-16T09:05:53","date_gmt":"2024-01-16T09:05:53","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/eskom-unbundling-is-reckless-privatisation"},"modified":"2024-01-16T09:32:43","modified_gmt":"2024-01-16T09:32:43","slug":"eskom-unbundling-is-reckless-privatisation","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/eskom-unbundling-is-reckless-privatisation","title":{"rendered":"Eskom unbundling is \u2018reckless\u2019 privatisation"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>Truth and Energy civil nuclear engineer Hugo Kruger said Eskom\u2019s unbundling is reckless, and claims that it will not privatise generation in South Africa are lies.<\/p>\n

Kruger told Newzroom Afrika that he has been opposed to Eskom\u2019s unbundling since the idea was first proposed.<\/p>\n

\u201cI even went to the Parliamentary Portfolio Committee to oppose it, but it seems the government has just got group think around it, and they will continue,\u201d he said.<\/p>\n

His comments come after Eskom appointed the board of directors of the National Transmission Company of South Africa (NTCSA), a key milestone in the power utility\u2019s legal separation into three entities.<\/p>\n

Kruger explained that unbundling means Eskom accepts private-sector participation in the country\u2019s energy sector.<\/p>\n

While South Africa has had an independent power producer programme for years now, unbundling the state power utility opens it up to competition for transmission, generation and distribution \u2013 and Eskom would not be able to compete.<\/p>\n

Kruger said there are many examples from across the world where unbundling failed, and countries had to \u201crebundle\u201d their state power companies.<\/p>\n

\u201cI have not seen anyone from the government \u2013 not from Pravin Gordhan, or from Minister Mantashe, or from the Minister of Electricity\u2019s office \u2013 citing how they are going to create guardrails against what failed in other countries,\u201d he said.<\/p>\n

\u201cI regard this as a highly reckless move. Zimbabwe unbundled once, they had to rebundle after it was run into the ground. Lebanon did the same thing, and Russia in the 1990s \u2013 there are so many failed examples of unbundling.\u201d<\/p>\n

In particular, Kruger said the World Bank has found that no country has successfully unbundled its state-owned power utility while struggling with energy security, as South Africa currently is.<\/p>\n

\u201cThe literature tells you countries that unbundled during load-shedding caused chaos, and yet we are going full-steam ahead with this thing. It does not make sense to me,\u201d he said.<\/p>\n

Kruger said he is not opposed to privatisation or increased competition in the energy sector in principle.<\/p>\n

However, he said introducing competition while nearly a third of Eskom\u2019s fleet is broken down will lead to the utility\u2019s bankruptcy and a fully privatised energy sector.<\/p>\n

While this model has worked well in other parts of the world, Kruger said the World Bank conducted a study comparing private and public utilities.<\/p>\n

\u201cAnd they found something incredible, which is that public utilities, under the right conditions, actually have lower tariffs to end-users than the private sector,\u201d he said.<\/p>\n

\u201cSo anyone who says to you the private sector is necessarily better is making those statements in contradiction to what is written in the peer-review literature.\u201d<\/p>\n

Complete privatisation could, therefore, not only lead to higher tariffs but also major job losses across the country.<\/p>\n

Former Eskom CEO Andre de Ruyter<\/b><\/p>\n

Former Eskom CEO Andre de Ruyter recently said South Africans should let go of their nostalgia for the \u201cEskom of old\u201d as the utility will continue to shrink and transform into a transmission business.<\/p>\n

He said the only logical outcome of Eskom\u2019s reform and restructuring is that the company will be unbundled into three divisions \u2013 generation, transmission and distribution.<\/p>\n

He said the utility will continue to generate electricity for a considerable time. However, it will inevitably become smaller as coal power stations reach the end of their lifespan and are decommissioned.<\/p>\n

\u201cMechanical equipment has a limited lifespan, and the new generation capacity will increasingly be provided by the private sector \u2013 that is a well-established fact,\u201d he said.<\/p>\n

De Ruyter said Eskom\u2019s transmission business would handle the high-voltage supply between power generation and consumption points \u2013 a role that Eskom will still largely play going forward.<\/p>\n

He recommended that the cheap financing the country gets from the EU and the US should primarily be used for expanding South Africa\u2019s transmission network because it is a natural monopoly and should mostly be owned by the state.<\/p>\n

On the other hand, the role of distribution will increasingly be fulfilled by local authorities like municipalities.<\/p>\n

This is because \u201cthe closer the service delivery is to the client, the better\u201d, he explained.<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. Truth and Energy civil nuclear engineer Hugo Kruger said Eskom\u2019s unbundling is reckless, and claims that it will not privatise generation in South Africa are lies. Kruger told Newzroom Afrika that he has been opposed to Eskom\u2019s unbundling since the idea was first proposed. \u201cI even went to the Parliamentary Portfolio Committee […]<\/p>\n","protected":false},"author":84,"featured_media":59634,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-59635","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nEskom unbundling is \u2018reckless\u2019 privatisation - South Africa<\/title>\n<meta name=\"description\" content=\"Truth and Energy civil nuclear engineer Hugo Kruger said Eskom\u2019s unbundling is reckless, and claims that it will not pri ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/eskom-unbundling-is-reckless-privatisation\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Eskom unbundling is \u2018reckless\u2019 privatisation\" \/>\n<meta property=\"og:description\" content=\"Truth and Energy civil nuclear engineer Hugo Kruger said Eskom\u2019s unbundling is reckless, and claims that it will not pri ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/eskom-unbundling-is-reckless-privatisation\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2024-01-16T09:05:53+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-01-16T09:32:43+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/01\/sm_1705384879.200072.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"576\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/eskom-unbundling-is-reckless-privatisation#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/eskom-unbundling-is-reckless-privatisation\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Eskom unbundling is \u2018reckless\u2019 privatisation\",\"datePublished\":\"2024-01-16T09:05:53+00:00\",\"dateModified\":\"2024-01-16T09:32:43+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/eskom-unbundling-is-reckless-privatisation\"},\"wordCount\":702,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/eskom-unbundling-is-reckless-privatisation#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/01\/sm_1705384879.200072.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/eskom-unbundling-is-reckless-privatisation#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/eskom-unbundling-is-reckless-privatisation\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/eskom-unbundling-is-reckless-privatisation\",\"name\":\"Eskom unbundling is \u2018reckless\u2019 privatisation - 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