IRVIN JIM|
THE National Union of Metalworkers of South Africa (NUMSA) has noted the announcement made by President Cyril Ramaphosa of government’s intention to amend Schedule 2 of the Electricity Regulation Act to increase the NERSA licensing threshold for embedded generation projects from 1 MW to 100 MW.
This amendment will mean that businesses will be able to self-generate up to 100MW of their own electricity. It will exempt generation projects of up to 100 MW in size from the NERSA licensing requirement, whether or not they are connected to the grid.
This will mean Eskom’s revenue will drastically reduce even more and it will be very difficult for the entity to honour its debt obligations.
Its current financial woes will therefore only worsen. Self-generation means that Eskom’s sales and revenue will sharply decline.
What President Cyril Ramaphosa should have done, faced with the complete failure and incompetence of the GCEO and the board that is plunging the economy and our country’s communities into rolling blackouts, is to have fired Andre de Ruyter and the entire board of Eskom.
Since Andre De Ruyter was appointed, we have experienced the lowest energy availability in history at Eskom, and his failure and the failure of Jan Oberholzer the COO, to implement quality maintenance, has triggered daily, lengthy blackouts across the country, during the coldest time of the year.
This is having a direct impact on our economy. Dozens of companies in the manufacturing sector retrenched last year because of covid-19 and also because of the harmful impact of load shedding.
Businesses cannot operate without consistent energy supply.
There are other former GCEO’s of Eskom who have succeeded in ending or drastically reducing load shedding, such as Brian Molefe and Matshela Koko.
They did so without the additional capacity of 4000MW which was provided by Medupi and Kusile.
But De Ruyter and Oberholzer have the benefit of additional capacity and lower demand, but they are still failing dismally to guarantee consistent energy supply.
Clearly, what this lays bare through this decision of the ANC government, led by Cyril Ramaphosa is that they have passed a vote of no confidence in Eskom.
NUMSA rejects Cyril Ramaphosa’s propaganda and lie that Eskom is too big to fail when the ANC’s consistent decision has been to collapse Eskom.
Their naked and open agenda is to privatise our country’s energy provision.
Andre de Ruyter’s action, including where he says that the collapse of Eskom is the “natural evolution” of our SOE, can mean only one thing, that he acts to promote this agenda championed by President Ramaphosa which is to fast track the collapse of Eskom and privatise our country’s energy provision.
To be blunt, President Cyril Ramaphosa is busy executing an open state capture of Eskom and our country’s energy provision by handing it over to IPPs.
It is a no brainer that the announcement made by President Cyril Ramaphosa has nothing to do with responding to the current, rolling blackouts and it will do nothing to secure the country’s consistent supply of energy to the economy.
There is no alternative except to fix Eskom. Fixing the current crisis of blackouts can only be done through quality maintenance of power stations.
Andre de Ruyter and cohort have failed to stop load shedding and we are very clear that he must go!
Such a decision to allow private companies to self-generate will worsen the decline in Eskom sales and it will increase in electricity tariffs.
The current blackout is self-generated as Andre de Ruyter is deliberately refusing to embark on quality maintenance of power stations, something Eskom did and delivered on, guaranteeing the nation security of energy supply with flying colours to the point of winning a global award.
It was in 2002 that Eskom was named as the global power company of the year, receiving the prestigious international award at the Financial Times Global Energy Awards for exhibiting technical excellence in plant production, maintenance and operation while at the same time demonstrating an ability to provide the world’s lowest-cost electricity to its customers.
Yet today, the agenda is to deliberately paint a picture of a failed and outdated Eskom so that they can fast-track privatisation of the country’s energy provision at the back of their self-generated crisis.
It is Andre de Ruyter who refused to implement the Cabinet decision to renegotiate IPP contracts bid.
It is Andre de Ruyter who refused to renegotiate exorbitant coal contracts that are bleeding Eskom’s balance sheet.
President Ramaphosa and Andre de Ruyter’s flimsy argument for the breaking up of Eskom stands for nothing except to hollow out of Eskom, its Independent System Market Operator (ISMO), which will have its own independent board to make it easy to drive their agenda to buy energy from IPPs without having to adhere to due process and protocols. NUMSA is not fooled.
NUMSA has consistently called on Andre de Ruyter and the current board to set up an Eskom Renewable Company and we further demanded that such an Eskom entity should be allocated 70% of the renewables to ensure that our country’s energy provision and supply is socially owned and controlled.
What a contradiction.
President Cyril Ramaphosa, misled the nation by saying that he agrees that Eskom should play a role in the renewable space, but this decision is handing energy provision over to private hands.
The victims of President Ramaphosa’s conflicted decisions and agenda are the poor workers of Eskom.
Of course his leadership and government have demonstrated that do not care for workers.
In fact, if anything, what they have demonstrated is how shrewd they are in launching a vicious attack on workers whilst benefitting the greedy, capitalist elite who they partner with in maximising profits whilst throwing workers into perpetual poverty through retrenchments.
This has been the case at SAA and SAAT and the entire aviation chain; in Denel; and in SABC.
Already it has been announced that in Eskom, approximately 6000 jobs are at stake.
The decision announced by President Cyril Ramaphosa last week to connect more IPPs into the grid outside of NERSA’s due process will only cause more job losses at Eskom.
We know for a fact that this agenda is driven by the heartless, ruthless Andre de Ruyter whose track record has been anti-worker, anti-democratisation of the workplace, anti-transformation where his approach to turning around a business is to “unbundle”, “right-size”, sell off units and assets at the expense of the future of the company and the future of workers, their benefits and conditions.
The measures which have been announced, do not deal at all with the current crisis of load shedding.
The rolling blackouts which Eskom has been implementing on a daily basis will continue to hamper our economic recovery and the months or years to come, and this was confirmed by the President.
The solution which has been proposed will only be implementable in 2025.
This begs the question, why bother to make the announcement in the first place, if it will not help solve this burning issue right now?
Clearly, the purpose of the announcement was to distract the public, and it seems to have worked very well.
Instead of the President demanding accountability from Pravin Gordhan and the Eskom board and GCEO, he takes decisions that are collapsing Eskom.
Captured media houses are no longer asking tough questions, but have blindly accepted this announcement by the President and his decision to collapse our strategic entity as a “breakthrough”.
The captains of industry in the IPP sector are rubbing their hands with glee because they are about to milk the public even more. And whilst the *Thumaminions celebrate, the public continues to be misled about the so-called benefits of Independent Power Producers (IPP’s).
IPP’s are unreliable and costly.
The new regulatory decision will allow for more IPPs to participate in the energy market, and the lie which we are consistently told, is that IPPs can reduce pressure on Eskom to generate power that meets demand, and by extension reduce the risk of load shedding.
The decision to add IPPs will cost R1.2 trillion for the next 20 years, and what is most painful is that they hardly assist when needed electricity generation.
For example, last year Eskom spent R28 billion on IPPs and they contributed only a measly 5% in total to the electricity which was generated, and IPP’s also contributed a whopping 25% to Eskom’s total primary energy costs last year.
The truth is that IPPs are a white elephant set up to benefit members of the ANC and crony capitalists who are connected to its leadership.
At the time that bid windows were approved by former energy minister Jeff Radebe, South African billionaire businessman Patrice Motsepe, who owns a renewable energy company and is related to both the current President and the former energy minister through marriage, was among those who would have benefitted.
In an opinion piece published in News24 in February 2020 we said: “The ANC has given up on Eskom; to that extent, they have decided that as a country we should not put our eggs in one basket and competition should be introduced in the electricity generation space. For right-wing ideological reasons, the ANC believes that competition will lead to reduced electricity tariffs and enhance the security of electricity supply in the not so distant future and ultimately will lead to increased Foreign Direct Investment. The fact is that no de-regulation of the electricity generation sector, anywhere in the world, has led to reduced tariffs and the security of electricity supply. This is a myth.
4The introduction of competition in the electricity generation sector will, as a prerequisite, require access to the transmission grid on a non-discriminatory basis to Eskom generation businesses, new state-owned electricity generation company and the (REIPP’s).”
This act, of allowing private entities to self-generate, is designed to destroy Eskom.
We keep being told about Eskom’s high debt burden, and yet they intend to increase that burden with the dodgy Kapowerships deal.
This deal will cost an additional R10.9 billion per year for 20 years from energy provided through powerships.
Eskom will have to pay for that. And by then, it will be an Eskom which has fewer customers.
This is whilst the private sector reaps massive profits because it has taken over Eskom’s share of the market with the help of government.
It is ironic that the founding member of NUM is leading the charge in destroying Eskom.
Eskom’s biggest challenge is that it has low sales volumes and it is losing customers.
By making this announcement, Ramaphosa is effectively suffocating Eskom, and he is siding with Eskom’s’ competitors.
The President is working against the interests of the very SOE that he is legally obligated to defend and protect.
This is another betrayal in a long line of betrayals by the governing party.
The ANC has sold out the working class again and what is ironic, is that this act of betrayal is being committed by a former founding member of the NUM trade union, which is organised at Eskom.
Ramaphosa has chosen to increase the wealth of the capitalists and has chosen to spit in the faces of his former comrades and the working class with this decision.
History has taught us painful lessons about the involvement of the private sector. The private sector’s involvement will mean major profits for them, but this always translates to massive job cuts, lower wages and benefits for workers and higher costs for the consumer.
Response to announcement on SAA|
This is also true of the recent announcement by DPE that SAA will have an equity partner. The airline collapsed under the watch of government as the shareholder.
The DPE conveniently closed its eyes to bloated evergreen contracts which chocked the airline to the point where it had to be placed under a lengthy, costly business rescue process.
At the same time, they restructured SAA and retrenched 3500 workers.
For almost a year, they refused to pay workers at SAA and its subsidiaries their salaries and delayed in paying Voluntary Severance Packages so that workers suffered during the pandemic.
The BRPs were paid in excess of R200 million, but workers got nothing.
The DPE did not lift a finger to help them through their suffering, even now, at the subsidiaries, there is a crisis because workers have not been paid, but DPE is silent.
The same DPE which refused to act to stop the looting of SAA through the bloated corrupt procurement spend, has now privatised it. Government will now only own a 49% stake at SAA whilst Takatso Consortium, which is a partnership made up of Harith General Partners and Global Airways, have been selected as strategic equity partners.
Global Airways is owned by Popo Molefe, (the former Transnet board chairperson) and Jonathan Rosenzweig.
Jabu Moleketi who was the former deputy minister of finance between 2004 and 2008 under former president Thabo Mbeki, is also chairperson of the Harith board.
It is important to point out that as things stand, no money has changed hands, only a vague commitment has been made by the consortium to capitalise SAA with R3 billion over 12 to 36 months.
They do not have the money for the airline now, so clearly, the goal of this deal was to collapse SAA, so that the same ANC which destroyed it, can then claim to have ‘saved’ the airline through a public-private partnership!
And at the same time, those who are benefitting from these deals are ANC cadres and their crony capitalist friends.
Instead of intervening in the corrupt procurement expenditure, the management of SOEs is restructuring and reducing workers’ wages and benefits, so that the ANC government can continue these corrupt arrangements.
This is what is happening at all SOEs, including Eskom.
The President is attempting to delude the nation about our economic recovery, when he says, “We are witnessing, as I predicted in the State of the Nation Address only a few months ago, the rebirth of our resilient Protea.”
We have to ask ourselves whether we are living in the same country.
Stats SA has just recently announced that unemployment has reached a new high and is now at 32.6%, the highest since the start of the Quarterly Labour Force Survey in 2008.
The expanded definition of unemployment which measures those who have given up looking for work is now at a shocking 42.3%.
In the last 27 years of ANC rule, South Africa has become the most unequal society in the world with poverty levels skyrocketing.
The very same ANC government is contributing directly to unemployment by collapsing, and then downsizing and restructuring state owned entities for their own benefit.
In our December2016 National Congress we said: “Zuma and the Guptas and Gordhan and the Ruperts are just one consequence of the ANC’s capitulation to racist and colonial capitalism in the negotiated settlement. They sold the dream of a racism-free, equal and just society and the full implementation of the Freedom Charter for a neoliberal capitalist society, complete with the corruption that comes with that package. The role of the liberation forces has been relegated to that of policing black and African poverty and labour, and running the budget, which in itself is controlled, as it cannot be more than a certain percentage, of the country’s GDP.”
What is to be done? We are not convinced that the decision taken by the president is lawful. Therefore, we are currently consulting our attorneys on the legal options available to us, to oppose the process of amending Schedule 2of the Electricity Regulation Act to increase the NERSA licensing threshold for embedded generation projects from 1 MW to 100 MW.
This includes the union taking a legal opinion on the privatisation of SAA where workers were not consulted and there is no clear agenda to ensure black economic empowerment in our very own South African SOE.
Furthermore, NUMSA is not deluded and we will not participate in the grand propaganda strategy of the ANC. The decisions taken by the governing party have reinforced the watershed 2013 resolutions which NUMSA took to reject the ANC and the alliance, and which catalysed the formation of the SRWP, SAFTU and the United Front as progressive social movements to advance the interests of the working class.
We have been proven correct to characterise the ANC as traitors of the liberation movement. We are unapologetic about our demands for genuine transformation of the economy for the benefit of the majority. We want economic freedom and that is only possible through nationalisation of the land and the commanding heights of the economy, to be used for the benefit of all of us.
We will not stop fighting for Socialism and full equality and genuine freedom for the black and African working class.
We will continue our work to organise the working class in order to replace this oppressive system.
- Irvin Jim is NUMSA General Secretary
