Minister of Finance, Tito Mboweni, has released an economic strategy paper which sets out practical proposals for reforms needed to get the economy growing, including selling some of Eskom’s coal-fired plants as part of restructuring the state-owned power utility.
Treasury’s proposed move will also help Independent Power Producers (IPP) enter into the energy industry by giving them rare access to the national grid and allowing them to sell their output – thus reducing Eskom’s hegemony and control of almost the entire electricity industry.
If implemented, it will indicate that government is serious about attracting investment in the sector by allowing private entities to become power producers.
Breaking Eskom into two separate entities – a generation entity which is privatised and a transmission/distribution entity will ensure that South Africa is not being forced to pay for the corruption and mismanagement which has taken place at Eskom.
“The Democratic Alliance welcomes this move which is in line with our Cheaper Energy Bill. We hold the view that this proposal will free up billions of rands which Eskom and our economy desperately needs.
Minister Mboweni’s proposals can only be effective if they are implemented. We can almost certainly expect, that it will face stubborn resistance from certain factions within the ANC that is bent on radical policies of increased state control over every aspect of the economy.” said Natasha Mazzone, the DA Shadow Minister of Public Enterprises.
“We believe that politics and ideology should not stand in the way of solutions that seek to get the power utility back to sustainable levels – in fact such solutions must be applauded and supported by all South African,” added Mazzone.