Unplanned outages at Eskom power stations reached more than 14 000MW on the Saturday before Christmas. This once again raised the spectre of load-shedding over the festive season – despite President Cyril Ramaphosa’s promises of no further black-outs over this period, at least.
Much of Eskom’s malaise is a direct result of its determination to put demographic representivity in key staff appointments before the crucial criteria of experience and qualifications. Eskom’s current ‘employment equity’ (EE) plan is supposedly on hold, but in practice knowledgeable white engineers are still being excluded from appointment to vital posts.
In February 2019, Eskom’s EE plan – under which the number of white engineers was supposed to be reduced by some 340 people by March 2020 – was suspended at the request of the utility’s then acting CEO Phakamani Hadebe.
However, few Eskom managers or personnel officers seem aware of this suspension. In addition, says a recent article in Rapport, a white Eskom engineer has been denied promotion no fewer than three times since August this year. When he asked why, he was twice told that there is still ‘a prohibition on the promotion of white men in engineering posts’.
Eskom’s determination to put demographic representivity before experience and institutional memory goes back at least as far as 1995. It was then that its board instructed that black people be appointed to management posts on the basis of their potential, rather than their proven capacity. (Three years later, the ANC may have used this example in writing the same flawed criterion into the Employment Equity Act of 1998.)
In 1997 Eskom resolved to raise black representation in professional and managerial positions to 50% by the year 2000. It also wanted all externally advertised vacancies to be filled by black people by that time.
In the words of Dr Dirk Hermann, chief executive of the Solidarity trade union, Eskom became ‘obsessed with changing its race profile’. Effectively, its focus moved ‘from power generation and distribution to race transformation’ – a shift for which all South Africans have long been paying an enormous price.
According to Dr Hermann, Eskom also began offering ‘space creation’ packages to white staff to encourage them to leave. By 2000 these packages, by Eskom’s own admission, amounted to R800m. Adjusted for inflation, this is equivalent to R1.8bn today.
At least 10 200 white employees left Eskom between 1994 and 2002 (as against the roughly 500 black staff who departed in this period). In addition, about 15 000 black personnel were employed between 2002 and 2014, while the number of white staff remained much the same.
Writes Dr Hermann: ‘The problem is not…that those who left the utility were white but that they were people who possessed managerial and technical skills’, along with important experience and vital institutional memory. ‘If 10 000 black employees with experience of ten years or more were to leave the utility today and they were replaced by whites with no experience, the consequences would be extremely negative as well.’
Other Eskom and ANC follies also persist. Despite the urgent need to ward off future crippling load-shedding, the government’s recent ‘request for information’ (RFI) regarding emergency generation projects seems to be aimed primarily at power barges or powerships, rather than any other option.
The RFI seeks to fill an energy gap of some 3 000 MW, so as to give Eskom space to ramp up its maintenance operations. But the RFI also wants power purchase agreements that are as short as three years. Proposed projects must be able to stop and start generation, and to connect to the grid within 12 months at most.
These criteria seem calculated to exclude solar and wind generation projects. These need to operate for 20 years or more to be economically feasible, and cannot generally come on stream within 12 months. Clearly, thus, it is the powership option – of which Mr Ramaphosa has repeatedly spoken – that the ANC has in mind.
However, the largest powerships generate about 500MW, so six would be needed to meet the 3 000MW target. Whether ‘such a number of these barges even exist’ is unclear, as Business Day reports. In addition, these barges are often powered by natural gas supplied from onshore resources, which South Africa does not have. Alternative fuel sources (diesel, or liquefied natural gas imported and then re-gasified) could be found, but costs will be high.
At the same time, the ANC has yet to authorise self-generation by the mines and other private companies. When Stage Six load-shedding was implemented a fortnight or so ago, the majority of the country’s underground mines were forced to suspend operations for at least a day. Some lost around a week’s production as safety requirements had to be met before mining could resume.
According to Roger Baxter, CEO of the Minerals Council South Africa, mining companies could bring some 870MW of solar power and up to 800MW of conventional power into production within three to four years. This additional 1 670MW in generating capacity would be established at no cost to Eskom, the government, or the taxpayer. However, no progress is possible until the ANC authorises such self-generation.
Mining and other companies also want the capacity to procure solar and wind power directly from Independent Power Producers (IPPs), without having to go through Eskom. But this too is prohibited – and the ANC has yet to grant the necessary permission.
Ideology lies at the root of the Eskom debacle and the ANC’s refusal to embrace the practical solutions within the country’s grasp. Despite the extraordinary damage Eskom is doing, the ANC/SACP alliance shows no signs of rethinking its commitment to a national democratic revolution (NDR) aimed at taking the country by incremental stages from capitalism to socialism.
The alliance knows that the established middle class has the strongest capacity to resist the NDR, so it constantly seeks to weaken, wrong-foot, and stigmatise the white minority. It also sees big business as ‘the primary enemy of the NDR’ and wants to limit, rather than expand, its role.
In addition, its current aim is to ‘roll back the capitalist economy’ by ‘decommodifying basic needs’ (including ‘energy’) and ensuring that ‘critical services’ are provided by Eskom and other state-owned companies (SOCs). As the SACP puts it, ‘SOCs operating according to a developmental rather than profit-maximising mandate have a central role to play in taking the country forward to a radical second phase of the NDR’. This radical second phase is vital, moreover, because it offers ‘the most direct route to a socialist South Africa’.
The NDR explains why the counter-revolutionary white minority cannot be allowed a significantly greater role at Eskom. And why private-sector generation, whether by IPPs or mining companies, continues to be delayed and denied, while the temporary use of costly powerships is regarded as a better option.
The right decisions for Eskom are unlikely to be made for as long as the ANC/SACP alliance remains blind to reality in its relentless pursuit of ideal ‘developmental’ SOCs and a supposedly bright socialist future.
If you like what you have just read, become a Friend of the IRR if you aren’t already one by SMSing your name to 32823 or clicking here. Each SMS costs R1.’ Terms & Conditions Apply.