Eskom ‘too big to fail’ – Ramaphosa

Staff Writer | May 16, 2019
President says government has a ‘credible’ plan to get the national energy generator out of the ‘mess it is in’.

President Cyril Ramaphosa told a Goldman Sachs Group conference in Johannesburg on Wednesday that the government had a ‘credible’ plan to fix Eskom. 

The conference was attended by the chairmen and chief financial officers of leading companies and institutions from South Africa and the rest of Africa.

Ramaphosa said Eskom would not be privatised, adding it was ‘too big to fail’ – a term that gained currency in the 2008 global markets crisis, when certain financial institutions were seen as being ‘too big to fail’, the remedy at the time being for the government to bail them out. Bailing out Eskom is not an affordable option for the South African government. 

In his address this week, Ramaphosa said of Eskom: ‘It's just too important to fail and too overarching in the life of our country. It holds the fortunes at an economic level and social level of our country's life in its hands.’

He reassured attendees that the government had a ‘credible’ business plan to get Eskom out of the ‘mess it is in’. 

‘It (the plan) has been tested and evaluated,’ Ramaphosa said. ‘It is credible and can be implemented and it is already being implemented.’

The president added: ‘We are not privatising Eskom, we are restructuring Eskom, a process that will allow the private sector to be our partners – our partners in generation (and) our partners already in distribution.’

In his customary blunt style, economist Iraj Abedian said that Ramaphosa must stop talking and start acting.

‘We’ve had 10 years of politics and destructive politics and the economy and society have been neglected. If you do the same thing expecting different results, then you will be disappointed,’ Abedian said. 

 

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