Eskom to be split

Power utility shake-up, poll date among Sona highlights

President Cyril Ramaphosa delivers the state of the nation address in parliament in Cape Town
President Cyril Ramaphosa delivers the state of the nation address in parliament in Cape Town
Image: Alexander Esa

Eskom will be remodelled and split into three state-owned entities dealing with generation, transmission and distribution, President Cyril Ramaphosa said in his state of the nation address on Thursday night.

Ramaphosa, who said the country faced a formidable task ahead and above all else, had to “get our economy working again”, also announced that the general elections will take place on May 8.

Eskom will also get financial support from the government, the details of which will be announced in the budget in two weeks’ time.

Ramaphosa said that this would be done “without burdening the fiscus with unmanageable debt”.

Eskom is deep in a financial and operational crisis, with a debt burden of R419bn, which it is unable to service from the revenue it earns. It is also straining to keep the lights on, with multiple breakdowns of its old plants due to neglected maintenance.

“To ensure the credibility of the turnaround plan and to avoid a similar financial crisis in a few years’ time, Eskom will need to develop a new business model,” Ramaphosa said.

The three entities will exist under Eskom Holdings, with each allocated its share of the costs of the business.

Ramaphosa said it was anticipated that the split would enable Eskom to raise funding for its various operations from the funders in the market.

Ramaphosa also announced the formation of a new investigating directorate, which will take the form of the disbanded Scorpions, to investigate and prosecute those implicated in state capture allegations.

The new directorate will see investigators working closely with prosecutors as more allegations emerge at the Zondo Commission, the Mokgoro Commission and the Nugent Commission.

The Scorpions were disbanded in 2009 after the dominant faction within the ANC accused the unit of being used to settle political scores.

Ramaphosa said the directorate would identify priority cases to investigate and prosecute and would recover assets identified to be the proceeds of corruption.

“The directorate will bring together a range of investigatory and prosecutorial capacity from within government and in the private sector under an investigating director reporting to the NDPP,” he said.

He emphasised that revelations at the different commissions of inquiries should be followed by swift prosecutions.

“The action we take now to end corruption and hold those responsible to account will determine the pace and trajectory of the radical social and economic transformation we seek,” he said.

Ramaphosa kicked off the delivery of his second Sona with a smart move to neutralise the EFF after it threatened to disrupt his speech over allegations that he had received R500,000 from controversial government service provider Bosasa.

In a clear charm offensive, he had members of the EFF and the entire house chuckling when he said he and DA leader Mmusi Maimane had agreed to sing the “Thuma Mina” song for Malema should he win this year’s elections.

Malema had threatened to ask Ramaphosa to come clean about his son’s business deals with the Bosasa Group.

This comes as the opposition accused Ramaphosa of misleading MPs when he told the house that a R500,000 payment by Bosasa to a trust account was part of a contract his son has with the company.

He withdrew the response when he was informed the money was a donation to his ANC presidential campaign.

Turning to the intelligence services, which critics say were weakened under former president Jacob Zuma, Ramaphosa said a high-level review panel led by former minister Sydney Mufamadi had recommended several measures to reconstitute the State Security Agency.

He said the measures would include the re-establishment of a state security council.

“Among the steps we will take to reconstitute a professional national intelligence capability will be the re-establishment of the National Security Council, chaired by the president, to ensure better coordination of the intelligence and security related functions of the state as well as the re-establishment of two arms of our intelligence service – one focusing on domestic and the other on foreign intelligence.”

Zuma did not attend the address, while former presidents Thabo Mbeki and Kgalema Motlanthe were present.

Also present were former parliamentary speakers Max Sisulu and Frene Ginwala.

Meanwhile, Ramaphosa said that after consultation with the Electoral Commission of SA (IEC) and premiers of the nine provinces, he intended to proclaim May 8 for the sixth democratic election.

The fifth term officially ends on May 6 and the elections have to be held thereafter.

The announcement kicks off election season, with political party campaigns set to start when the date is gazetted.

The date is strategic for Ramaphosa to manage the difficult dynamics within the ANC – Zuma’s court application for a permanent stay of prosecution in the corruption case against him takes place on May 20.

Zuma has used his court appearances to mobilise support for himself and has been critical of the ANC from that platform. This poses an electoral risk for the ANC, particularly in KwaZulu-Natal.

“This is an opportunity for our people to exercise their hard-won right to determine the direction of this country,” Ramaphosa said.

“We wish to remind all eligible South Africans who have not yet registered as voters that they still have until the proclamation of the election date to register.”

He also announced that:

● The National Health Insurance Bill would be ready to go to parliament soon. However, he did not say the contested bill had been approved by the cabinet, suggesting further work may still be done on it before it is considered by MPs.

● Stabilising the business processes of the National Student Financial Aid Scheme (NSFAS) would be a key government priority in 2019.