The minister of international relations and cooperation, Naledi Pandor, questioned why the power plant continued to be damaged and labeled it an “act of opposition to South Africa”. The statement echoed the minister of mineral resources and energy, Gwede Mantashe, who said the utility was “actively disrupting to overthrow the country”.
These are two declarations from cabinet ministers who are concerned about the detrimental effects of the sixth phase of easing the burden on people’s lives and livelihoods. This shows that there is some agreement among cabinet ministers that Eskom needs to be fixed immediately.
The intention to merge state-owned enterprises (SOEs) into line departments was supported by the ANC delegation at the party’s 55th national conference held from 16 to 20 December 2022 at Nasrec in Gauteng.
This means that Eskom should be transferred to the department of mineral resources and energy, Transnet and SAA to the department of transport and Denel to the department of defence. ANC delegates made structurally sound critical decisions about reforms. This decision will promote transparency, provide certainty in the clear direction of BUMN, and responsible departments will be held accountable.
It also allows faster decision-making and execution and eliminates unnecessary bureaucracy that involves many departments that are often at fault. The confusion is caused by the often conflicting messages from the department of mineral resources and energy and public companies the department will eliminate and provide certainty to citizens and investors. This decision creates a “one-stop shop” and a clear “message” for energy-related issues.
Mantashe has committed to ending the burden-vomiting in less than “six to 12 months”, which is supported by the finance minister, Enoch Godongwana. This makes the constant attacks on Mantashe strange and suspicious. A closer examination of the state-owned companies operating in the department overseen by Mantashe shows clear signs of change.
Each of the 12 state-owned enterprises has improved and stabilized under their leadership. In the previous fiscal year, the department of mineral resources and energy received six unqualified audits with no findings and five unqualified audits. This shows that out of 12 State Owned Enterprises, 11 have unqualified audit results with six getting a clean audit, which is a significant increase.
A close examination of the new acquisition strategy by the Central Energy Fund (CEF) – an entity in the mineral resources and energy department – shows that it has a strong professional team and a good financial position. This is demonstrated by the strategic acquisition of a 50% stake in BP South Africa’s Cape Town Terminal, which has a storage capacity of approximately 86 million liters of diesel, gasoline, jet fuel and illuminating paraffin.
CEF acquired a 60% stake in Avedia Energy, which owns a liquefied petroleum gas (LPG) terminal in Saldanha. CEF completed the acquisition of a 30% stake in the Republic of Mozambique Pipeline Company, increasing its equity from 25% to 40%.
This can be added to the Geosciences Council, which has published more than 90% of geological data online for free to drive exploration activities in the country from 1% to 5% of global exploration. The council is working on technologies such as carbon utilization and storage in Mpumalanga.
It should be noted that the attack was not directed at the sixth stage of the unspecified burden, or other state-owned enterprises that failed in the department of public enterprises. This leads me to believe that the disclosure may have been made in an attempt to trigger the energy crisis, anger people, and sell Eskom for R51 similar to the sale of SAA.
Details for the sale of SAA are still unclear and subject to lawsuits. The explanation given is that the privatization of state-owned enterprises is an important reform for the nation’s economy, according to BUMN minister Pravin Gordhan, as quoted by Bloomberg. Therefore, there are clear indications that Eskom, Denel and Transnet already have buyers who will not pay more than R51.
This attack on Mantashe should be characterized as narrow, driven by greed and personal. The attack is on renewable energy, restructuring and unbundling of Eskom for privatization and liberalization of the energy market (for example, plans for electricity exchanges).
These people seem to know that Mantashe will be able to fix the load-vomiting in a short time. That means the plans to run Eskom down, unbundle, privatize and sell it at R51 will not happen in the department led by Mantashe. This also means that the vehicle is free from renewable lobbying and funding is complete.
A pragmatic balanced energy mix guided by the Integrated Resource Plan (IRP2019) which includes coal, nuclear and gas, will be a priority. The minister was called a dinosaur and many names.
The attack should be seen as the final kick of a dead horse – Eskom’s exclusive milking of non-renewable energy will end, and a full audit or evaluation should be carried out to compare the performance of renewable energy with the planned performance and contracted capacity.
We need to have enough information to complete this endeavor. In the meantime, the department of minerals and energy should not be afraid of renewable energy lobby groups, and should not be the ministry of renewable energy. If they give up, we will never recover from permanent poverty, unemployment and inequality.
The ANC delegates really agreed that they cannot deny the existence of climate change. But he stressed that the energy transition must be handled carefully so as not to undermine development and have a detrimental impact on life and living resources.
South Africa also has uranium mineral resources and coal for nuclear and coal power plants. Therefore, concentration in gas, nuclear and coal can have a significant impact on employment and economic growth, which can reduce poverty, unemployment and inequality.
As a sovereign country, South Africa has the right to choose its energy sources. Energy policy cannot be left to NGOs and groups of individuals with a financial stake in renewable energy.
National interests play a role in the energy debate. Energy is still central to development; it is also about national security and freedom. A country’s access to energy determines its destiny.
A balanced energy mix should be prioritized, guided by IRP2019. This means that South Africa should be allowed to pursue natural gas exploration, development and exploitation both offshore (in the Limestone) and onshore (in the Karoo Basin) without fear of foreign-funded NGOs.
Siyanda Mngadi is a director at Ntuthuko Resources, Energy, Mining and Exploration. He wrote in his personal capacity.