Cyril Ramaphosa sticks to his guns on Eskom split

President Cyril Ramaphosa has stuck to his guns on the unbundling of Eskom, saying “a unitary Eskom has proven to be difficult to lead”.

In his reply in the National Assembly to the state of the nation address debate on Thursday, Ramaphosa hit out at what he said were reckless claims and political posturing around the unbundling of the power utility.

He insisted it was the best option on the table for now and that it was not a path to privatisation.

“Ultimately, the restructuring of Eskom is intended to ensure security of electricity supply for the country, which is critical to building up the positive investor sentiment and confidence essential for the investment required to the sorely needed jobs,” Ramaphosa said.

He said finance minister Tito Mboweni would announce measures that the government would undertake to assist Eskom to stabilise its finances, and said that there had to be cost-cutting at the power utility.

“Financially, the reference to cost-cutting should be understood not to mean retrenchments.

“The preferred strategy in reducing human resources costs will be to offer voluntary packages to staff.”

He aimed a further punch at Eskom’s cost structure, saying it had anomalies that required urgent attention.

“We further need to look at the benefits and perks received by Eskom staff, including those offered through the Eskom Finance Company, and we need to jointly ask ourselves whether it makes sense for Eskom to have this business unit and be offering to its staff belowmarket-rate finance packages, whose losses are ultimately underwritten by the state.”

In a thinly veiled message to organised labour, Ramaphosa said the idea that the only way out was through bitter confrontation and conflict should be rejected.

“Our challenges will not be resolved in the streets, but we will gather around the table to find workable solutions,” he said to unions and opposition parties who have vehemently rejected Ramaphosa’s announcement last week.

He said the government needed to aggressively intervene to put load-shedding behind the country.

“While restructuring Eskom won’t solve the immediate electricity supply crisis, it will position the company to more effectively meet the country’s energy needs into the future.

“There is no single solution to the problems at Eskom – neither restructuring, nor refinancing, nor cost-cutting, nor tariff increases, nor better plant maintenance on their own will have the necessary effect.

“We need to pursue all of these measures and more, simultaneously, in a co-ordinated manner, and with purpose, to turn the utility around.”

Ramaphosa also said he had constituted a special cabinet committee on Eskom, which would be led by deputy president David Mabuza and consist of public enterprises minister Pravin Gordhan, energy minister Jeff Radebe and Mboweni, as well as the transport, intelligence and police ministers.

He said they would have to be seized with the matter of Eskom on a daily basis and provide him with reports daily on what actions needed to be taken to secure the energy supply.