Electricity Minister Kgosientsho Ramokgopa has sent a clear message of the tough decisions the government would have to take in addressing the energy crisis to avoid a stagnant economy, growing unemployment and a collapsing grid.
He said Eskom’s ailing power stations would need fiscal support to ensure they were able to keep the economy going and retain much-needed jobs.
Capital investments would be needed to refurbish some of the old plants at Eskom. Some were built in the 1970s, 1980s and 1990s.
Ramokgopa said these decisions would have to be taken urgently as time was running out.
Out of all the power stations he visited, Ramokgopa found the need to make investments in the Eskom fleet.
If this was not done, it would threaten the stability of the grid and the economy and paint a bleak future for the country.
He said the stark choices faced by the country would have to determine the road ahead.
Ramokgopa said Eskom, through funding from the fiscus, would have to invest in the coal-fired power stations as some were old.
“We have a choice and that choice is that the entity called Eskom, and we know its problems are well documented, has no money to invest in these capital costs.
“We must accept that as given. We must accept that we will go into higher stages of load shedding, more people are going to lose jobs, accept that farmers won’t be able to produce, accept that more learners will drop out, accept that the total cost to the South African economy continues to be exponential, or say let’s take a hit as South Africa.
“Accept that this is expensive but we need to find money from somewhere. It’s not my space to say where money will come from. But I am saying we are faced with that stark choice,” said Ramokgopa.
He said the decisions would have to be made in consideration of the need to get the economy out of the quagmire.
This would help keep many people in their jobs.
The investments that would have to be made to fix Eskom’s power plants would benefit the economy in the long term.
“We have gotten ourselves into this position, we must get ourselves out of this position. Protect the balance sheet, collapse the South African economy.
“Burden the balance sheet or additional fiscal support. It’s got its downside implications. Save the South African economy.
“Once it thrives you are able to get your returns back, protect the employment, broaden the tax base, there is a greater level of investments, the economy grows, the national revenue grows, you are able to defray those upfront capital costs,” said Ramokgopa.
These are the investments needed to mitigate load shedding and protect jobs.
Current Affairs