On Tuesday, the National Assembly passed a special appropriation bill to permit the South African government to shift R59 billion from the National Revenue Fund to Eskom as part of the many interventions for its financial recovery.
In 2015, Eskom was allocated R23bn by the erstwhile finance minister Nhlanhla Nene, who made commitments that such will never happen again.
We, as the EFF caucus, submit that the following key interventions should be made to bring stability to Eskom.
Firstly, Eskom should standardise all coal prices and only pay the prices determined by the National Energy Regulator of South Africa (Nersa).
This would save Eskom billions of rand. Eskom and the government should announce an annual ceiling price per ton of coal from all suppliers, let us say of R400/ton.
If the suppliers cannot continue supplying Eskom, the government should massively capitalise the African Exploration Mining and Finance Corporation, which is a state-owned mining company, to take over the contracts of those who cannot supply coal at normalised cost prices per ton.
Secondly, Eskom should fundamentally review all power purchase agreements (PPAs) with independent power producers (IPPs) with the aim of exiting these nonsensical contracts.
In its own financial report, Eskom admits that as things stand, IPPs account for more than 25% of primary energy generation, yet produce less than 5% of the needed energy.
Put differently, Eskom expends more than 200 cents to purchase electricity per kilowatt hour, which it retails for less than 100 cents. This is pure foolishness.
Thirdly, the government should assemble a highly skilled panel of engineers from all over the world to investigate the delays in the completion of the two major power stations, Kusile and Medupi.
Fourthly, the government should issue requests for proposals from private developers of nuclear power stations, which should necessarily use a build, operate and transfer model to illustrate how they will use their own money to construct nuclear stations, operate them for a period not exceeding 25 years, transfer skills and thereafter hand over to the state.
Fifthly, the government should massively invest in renewable energy projects.
All these steps cannot happen if the government’s appetite is to unbundle Eskom in the middle of a financial crisis.
The other important component on political oversight of Eskom is that it should not have a single ministry as a shareholder representative.
The shareholder should be represented by the ministries of public enterprises, minerals and energy and finance.
Where possible, the Public Investment Corporation loan to Eskom should be converted into equity and the PIC should have direct shares and a say in the running of the company.
Lastly, the leadership instability in Eskom should be immediately resolved through the appointment of a capable permanent board of relevant experts in various fields.
The current leadership of Eskom is neither capable nor skilled in the provision of stewardship to the utility.
* Shivambu is EFF deputy president.
** The views expressed here are not necessarily those of Independent Media.