As Eskom turns 100, how should it be remembered?

As he parts ways with Eskom, former CEO André Ruyter, the Samson of our times, has pushed the pillars of the Eskom temple and the temple has collapsed on us. Photo: Armand Houg/ African News Agency (ANA)

As he parts ways with Eskom, former CEO André Ruyter, the Samson of our times, has pushed the pillars of the Eskom temple and the temple has collapsed on us. Photo: Armand Houg/ African News Agency (ANA)

Published Feb 26, 2023


Eskom turns 100 years old next month. And it should be a proud moment in our history. It is not.

In another column, I asked what happens to South Africa when the grid collapses. To do this, we need, once more, to look at the Indlulamithi South African scenarios, which track future social, political and economic developments.

Are we going to continue with a neo-liberal policy and remain true to a Gwara-Gwara outcome or are we going to learn from Hendrik Johannes van der Bijl, the engineer of former prime minister Jan Smuts, and approximate towards a Nayi-le-Walk outcome?

March 1 will mark exactly a century since Smuts inaugurated into office his chief scientist, Van der Bijl. His first assignment was to establish Escom, the precursor to Eskom. Thus, on March 1, 1923 the Electricity Commission of South Africa was commissioned.

Van der Bijl borrowed R16 million from the government to undertake the establishment of Escom. He soon paid the loan as Escom spawned Iscor and Spoornet, both key industrial infrastructure, as well as the Council for Scientific and Industrial Research.

He would soon realise that to muster a complex infrastructure amid World War II required a financing mechanism. The Industrial Development Corporation was born to play that critical role.

The Eskom Act 40 of 1987 changed the name from Escom to Eskom.

At 100 years, it is a critical moment to pause and ask ourselves, as a country, how Eskom should be remembered.

Should it be remembered as that which our political edifice pushed over the cliff to fall miserably and create the noise of a tree falling in the forest? Should it be remembered as the forest Van der Bijl nurtured and grew silently into a complex forest that industrialised South Africa?

One wonders if Eskom, at 100 years, falls from glory with a cry resembling that of Judas Iscariot betraying Jesus on the fateful Last Supper.

Against this backdrop, how will South Africa remind itself of the birth of obnoxious apartheid in 2048, a mere 25 years from now?

The cancel culture in South Africa has moved apace and it is eating at the conscience of the nation, leaving it ghastly ghostly.

Robben Island, a monument of endurance, resilience, hope and freedom, has been left to decay. The resting places of stalwarts, who created conditions for South Africa to have a generation that can proudly go to the polls to vote for a government of their choice, remain desecrated.

In fact, dismembering institutions is at the heart of South Africa’s decomposing political and economic carcass. There is no honest atonement to the rationale of our policy actions, especially, the one towards Eskom.

First, we need to remind ourselves how Eskom ended up where it is today. While institutions change missions and their composition as times change, the change for Eskom after 1994 has been for the worse. Unfortunately, all for the wrong non-economic reasons. A directional change that was unprovoked.

Eskom had a higher rating than the sovereign by 2001.

At the turn of this century, Eskom, for no good reason, was corporatised, then subsequently, its expansion programme was driven through borrowing from the market, under the justification that through the user-pay principle, the loan would be paid.

But municipalities and government departments refused to pay Eskom. In fact, municipalities deployed the user-pay strategy as a cash cow to keep them alive. This precipitated rate hikes in the cost of electricity, leading to it becoming unaffordable for households, even with the free basic electricity the government provides.

In a country where more than half the population is poor and unemployment is rife, electricity becomes unaffordable. Paying for it isn’t a priority because matters of food take front row in the consumer basket. Communities began to default.

Soon afterwards, renewables entered the scene and ruptured the smooth running of Eskom by demanding a take-off price that Eskom could not afford.

Now, the Treasury has removed the loan book from Eskom, thus relieving Eskom of its debt obligation. Many heterodox economists, among them Redge Nkosi, have questioned the wisdom of opening Eskom to global loan sharks.

They argue that the global mashonisas will hurt Eskom. They advocate that such loans could be taken against the sovereign and, in particular, the balance sheet of the SA Reserve Bank.

This is exactly what Van der Bijl did. He repaid the R16m loan within five years and then, through the same process, created the developmental infrastructure that the ANC government inherited post-apartheid.

Unfortunately, our thoughtless policy honchos in the government have decided to nitpick Eskom’s loan, rather than learn from Van der Bijl with regard to the economic treatment of state-owned enterprises in facilitating their developmental role.

A Van der Bijl approach is the general principle. Without a developmental orientation and a manifestation of such principles applied to the SOE infrastructure, a developmental state is but a dream.

The idea that such financing modalities crowds out the private sector is not proved in economics. Instead, the converse is true in all developmental states. This is because of their public service orientation and their de-risking effects for entry of the private sector to interface in the industries.

The poverty of thought in our government is to isolate the Eskom case as a peculiarity instead of understanding it as a fundamental generality. It has not learnt the lessons from Van der Bijl.

As he parts ways with Eskom, former CEO André Ruyter, the Samson of our times, has pushed the pillars of the Eskom temple and the temple has collapsed on us.

Finance Minister Enoch Godongwana haplessly wants to lift one pillar, in the hope that the temple will right itself. The temple can’t. To address this, he needs all 12 pillars and these have to germinate simultaneously like Van der Bijl infrastructure.

Unfortunately, they can’t because the SA Reserve Bank has been allowed to hold onto its own pillar, resigning itself from national developmental role, as it contemplates its own survival in a post-collapsed Eskom.

What a sordid way to commemorate Eskom’s centenary in the dark – a sure Gwara-Gwara outcome. What then is the legacy of President Cyril Ramaphosa and his resigning “scientist” De Ruyter?

Dr Pali Lehohla is the director of the Economic Modelling Academy, a professor of practice at the University of Johannesburg, a research associate at Oxford University, a board member of Institute for Economic Justice at Wits and a distinguished alumni of the University of Ghana. He is the former statistician-general of South Africa.