MATSHELA KOKO
IT IS the aim of the news reports and their authors that members of the public are made to form mental representations of state-owned enterprises that are looking much worse today than they did pre-1994. The contents of such mental representations are clearly manipulated by the contents of such news reports.
Once given the carefully selected facts about state-owned enterprises, and the facts are presented in a seemingly objective fashion by journalists or by those that they accept as credible sources, the public is then expected to form a mental picture of state-owned enterprises that have been grossly mismanaged by the ANC-led government since 1994.
The public would then act accordingly by rejecting the ANC government in favour of a coalition government. This is not about the good versus the bad in the ANC. It is about weakening the ANC and building an alternative power bloc outside of the ANC. The power bloc that will support deep structural reforms in the economy.
The news media are controlled mainly by the white power elites. Their common ideologies are jointly produced, each acting within its own sphere of influence and control, but each dependent on the other. To borrow from Teun van Dijk of the University of Amsterdam, despite occasional conflicts, contradictions, controversies, and varying directions of control, the news media and the corporate elites are inherently part of a joint production of a consensus that is geared towards a deep structural change in the South African economy. Regrettably, black business and the black middle class are the most irrelevant in this power play.
The corporate elites want deep structural reforms and for them the current socio-economic crisis presents an opportunity to reform the ownership structure of the economy in South Africa. They also see an opportunity to repeal legislations such as the Labour Relations Act, Basic Conditions of Employment Act, Employment Equity Act, the BEE laws, and the National Minimum Wage Act and to replace them with statutes that will favour them.
A strong and united ANC stands in between these deep structural reforms. Most importantly, the news media generally do not act as major opponents of corporate policies. The news media will continue to act in the interests of the corporate elites to achieve these deep structural reforms.
The key structural reforms in the electricity sector are twofold: one is to increase the role of independent power producers and the second is to unbundle Eskom into generation, transmission, and distribution entities. The rationale, according to the Washington Post of September 7, 2021, is that South Africa was able to produce more electricity than it needed when white minority rule ended in 1994 and since 2005 the country has suffered intermittent power cuts because the dilapidated power stations are unable to keep pace with the electricity demand. Objectively, according to Washington Post, a shortage of money forced Eskom to cut back on maintenance and repairs. This, together with a skills shortage, has left Eskom power stations in a state of repair or ruin.
The mental picture that Washington Post wants the public to draw is that Eskom was never properly managed since white minority rule ended in 1994 and that the ANC government, even under President Ramaphosa, has failed to manage Eskom as a prudent owner and operator of generation, transmission, and distribution assets. Once this mental picture is set, the public is expected to act independently to support initiatives that will ease electricity supply shortages.
The government has already made it easier for companies to generate their own electricity of up to 100MW in size without requiring a licence from the National Energy Regulator of South Africa and they will be able to sell power to other customers by wheeling electricity across the grid.
Strangely, Eskom through its chief group executive André de Ruyter, has decided that as a country we should not put our eggs in one basket called Eskom and that competition should be introduced in the electricity generation space. The mental picture that André de Ruyter has is that Eskom is simply not capable of operating sustainably and cannot keep the lights on reliably.
The energy availability factor — a metric that measures the performance of the generating plant – is currently at 64% compared to a target of 73%. In fact, in its annual financial report of 2021 Eskom is projecting the energy availability factor of 72% in 2024. To keep the lights on reliably, Eskom must achieve the energy availability factor of at least 75%.
The news media, the corporate elites and André de Ruyter are inherently part of joint production of a consensus to bring about the structural changes in the electricity sector for the benefit of the white corporate elites and of course Mr Ramaphosa is the enabler.
There are two main obstacles to key structural reforms in the electricity sector: the legacy Eskom debt of R400 billion and the municipal debt of R35bn. It came as no surprise that the Business Day editorial of September 2, 2021, vociferously argued that government must act immediately to address these two issues so that key structural reforms in the electricity sector can proceed.
The argument is that government must take over a sizeable portion of the legacy debt onto the sovereign balance sheet so that when Eskom is finally split, bondholders will know which parts of the debt will be allocated where and how creditworthy is the entity that is supposed to repay them.
Government has no choice. Eskom is not generating sufficient cash from its operations to cover its debt service costs. The situation will get worse given the crowding effect of independent power producers on the Eskom sales volume.
If the government does not take over at least R150bn of the Eskom legacy debt on its balance sheet then key structural reforms in the electricity sector will not happen. De Ruyter is trying to secure cheaper financing for renewable energy projects in exchange for accelerating the closure of coal-fired plants. This is a false start.
On many other issues, the press may, within certain boundaries, play a more critical role vis-a-vis another corporate elite group. This is not the case when it comes to independent power producers and the unbundling of Eskom. The energy availability factor of 64% is a mediocre performance by any standards but it is a good enabler for the independent power producers’ projects and the unbundling of Eskom. This is the only reason why De Ruyter and his board are liked today. They act in the interests of the corporate elite to the detriment of the majority of the citizens of South Africa.
Matshela Koko is Eskom’s former interim group chief executive.
Daily News