With the agenda of the Tshwane municipality to embark on a 40-year leasing of the Rooiwal and Pretoria West power stations firmly back on the table, stakeholders have urged to formulate a lease agreement resistant to malicious political manipulation.
In forging ahead with the proposal for the 40-year lease of the Rooiwal and Pretoria West power stations in terms of Regulation 35 of the Municipal Asset Transfer Regulations, following the approval by the council for a public participation report, the Tshwane municipality has been advised not to proceed with the business-as-usual approach.
Martin van Staden, head of policy at the Free Market Foundation (FMF), said the NPO had proposed that the municipality look to wholly privatise the power stations, or alternatively formulate a lease agreement that was resistant to malicious political actors down the road.
“The business-as-usual approach is fraught with risk, which is why the FMF has proposed that Tshwane either privatise the power stations outright or subject them to a state-proof lease.”
Van Staden said even though they welcomed the initiative by the municipality to lease the decommissioned power stations to private sector operators to begin generating electricity once more; they remained equally concerned that the initiative appeared to assume the premise that the power stations must remain the owned property of the City.
She added it also assumed that South African politics, moreover municipal politics, were generally sensible and benign which was far from the truth.
“While the current government of Tshwane might look positively upon an independent operator generating electricity for the grid, future administrations could conduct themselves maliciously and undermine the operators or even cancel the lease for partisan reasons.”
Through outright privatisation, she explained politically partisan considerations would be removed entirely from the new operators’ decision-making processes, and allow them to focus exclusively on generating electricity for profit, and the city to include restrictive conditions.
Alternatively, a ‘stateproof’ lease would be able to protect the operators and enable them to protect themselves from future political harm or hostility.
“In anything the lease should be extended from the currently proposed 40 years to 99 years, to place ‘the expiry of the lease well outside of the current ‘era’ of South African politics with all its associated malice and score-settling.”
Just last month during a walkabout of the Rooiwal station last month Tshwane MMC for utilities Themba Fosi said keeping the Rooiwal and Pretoria West stations on the city’s books was a costly exercise, costing the municipality R300 million for staff and maintenance, hence the need to consider going private.
Although the Rooiwal power station can at its peak reportedly generate about 300 megawatts of electricity, for the past decade, it has according to officials not generated any power as it has been placed under long-term care and maintenance.