JOHANNESBURG - Public Enterprises Minister Pravin Gordhan today unveiled a special paper that sets out a new future for Eskom, the cash strapped state-owned company whose R450 billion debt is a threat to the national purse.
Addressing journalists in Pretoria today, Gordhan said the paper detailed a new business model for Eskom that would ultimately result in cost-effective electricity for all South Africans.
“This is the beginning of the process. We are clear that Eskom cannot remain as it is,” he said.
The plan is focused on unbundling Eskom and details the separation of Eskom’s transmission division. It proposes the introduction of competition by grouping Eskom’s 16 power stations into three clusters to generate electricity and compete among themselves. Gordhan said each cluster was expected to act as a business.
“Eskom lacks competition, as a result, we do not have competitive prices. The clusters will create a competition which is good for consumers,” said Gordhan.
Gordhan said the paper was based on the recently gazetted Independent Resource Plan which highlights the country’s energy mix for the next decade.
President Cyril Ramaphosa said in his state of the nation address February that Eskom needed to be split into three entities namely transmissions, generation, and transmission to save it from the brink of disaster.
Eskom is responsible for 95 percent of South Africa’s power generation.
Gordhan pleaded with South Africans who can afford to pay for their electricity consumption.
“If you can afford to pay, it is wrong not to pay. As a consumer that is the contribution you need to make for our electricity,” said Gordhan.