Open Energy To The Home (ETTH) to free those prepaid meters from ANC Monopoly Capital.

WHILE residents of Lavender Hill and Steenberg were protesting against prepaid meters and Cape Town City officials sought to blame Eskom for tariff increases — some 20 000 Capetonians attended a two day ‘Solar & Storage Convention’ at the CTICC. As an angry mob gathered along military road, the public were treated to demonstrations of solar power and storage solutions, with storage a key element missing from the debate on renewable energy, and a programme that include Internet of Things (IOT) and smart grids.

It is a stark contrast between those able to afford solar financing options (40k to 60k is not cheap) required to embrace a smarter future which seeks to bring renewable energy into the home, with those left out of the equation. Electricity provision has historically been a state monopoly. Yes there is progress when it comes to feed-in tariffs, but the ‘energy divide’ between South Africa’s rich and poor demonstrates how far we have to go before we can start referring to parity of treatment and equality in energy access.

All of this is occurring during a pivotal “Big Bang” moment for the energy sector, years in the making.

This month literally saw the signing into law by the President of an amendment to the Electricity Regulation Act, one which heralds a market reform of the country’s electricity regulations.

After decades of stagnation, Eskom is finally taking up a new role as a ‘national transmission company’, allowing Independent Power Producers (IPP) to compete with the behemoth in generation of electricity. Forgive me if I sound a little droll, a brave step, better late than never, but totally unacceptable when one realises our government is merely re-configuring a problematic state monopoly, with the resulting pyramid scheme involving the bulk sale of electricity by Metros and Munis to consumers and end-users still very much in place.

Demand Energy To The Home (ETTH)

Yes, us luckless consumer , those who actually pay for electricity instead of stealing it outright, are still being treated as an awkward afterthought by our fancy-pants President and his bloated cabinet.

We are thus issued with a100 day notice of an ‘impending change to our prepaid meters’ which will require new software via an Eskom circular, then a simple insert on SABC news. It appears Parliamentarians don’t use prepaid meters or worry about working in the dark. Zero announcement of tangible assistance to impoverished households, and nothing when it comes to upgrading our meters to a new, supposedly more secure system, with even less debate on the timing of the announcement.

Imagine what would have happened if the ANC had introduced a similar policy affecting mobile phones instead of embracing a big bang in 1994?

Remember that Nokia moment when literally everyone in South Africa had a Nokia cellphone?

What our President was really saying, “from next week, many ISPs will be able to provide the nation with Internet, but not one will be able to sell data directly to the consumer, fibre transmission will remain a monopoly.” Or “Folks, every small town and dorpie will be allowed to be in the Internet business” but “no actual business must operate with the intent to do business“, (apparently making money is a crime in South Africa?) as queues form outside the relevant government departments notorious for lack of service delivery?

Do you honestly think we would have smart phones if our government was the sole supplier of mobile telephony? Thirty years of socialist tinkering with the our economy has produced an entire generation without jobs.

This months Electricity Amendment announcement is really the dramatic equivalent to our Slick President announcing our country will be finally getting colour television, except the whole world has already moved on to HD screens, energy smart grids and streaming services.

Open Net Metering

If I still have your attention, (see my critique here and here) then consider open net metering. Currently our prepaid meters have no specification for connectivity, no external ports with which to interface these meters with a local area network (LAN), and no way of channeling data on the cost of these units from Pretoria, to our household consumption and home automation assistants.

Not only are we faced with a proverbial closed prepaid proprietary system whose data is controlled by the mandarins-in-charge (forgive the pun), but there is no clear path towards ‘time of use’ consumption, autobidding of energy, demand management, future options and a market trajectory which lowers the cost per watt, instead of creating energy inflation.

The global trend is towards concatenation or reduction of supply chains, towards placing a ‘factory on the desktop’, or a snappy logistics company at the factory gate, not the Presidents long-winded version of corporate capital, monopolistic bureaucracy crossed with a pyramid scheme and complicated multi-tier government.

Imagine being able to charge up your batteries when energy is cheaper, then using your storage when consumption is at a peak and expensive?

Where are the incentives from government for households to embrace a better future filled with electric vehicles charged by renewable and solar energy?

If you think this is a topic exclusively for the well-to-do? Think again, because collective housing schemes could also pave the way to collective energy generation at local level and potentially solve many of the problems encountered by the residents of Lavender Hill.

READ: Flogging a Dead Horse

Organised crime, Eskom monopoly, De Ruyter en Swart.

ALARMING accounts of several crime syndicates operating within Eskom have arrived on the heels of similar findings made by the Zondo ‘Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector including Organs of State’. Judge Raymond Zondo’s investigation is outlined in Volume 4, and two parts, aptly named Eskom 1 and Eskom 2.

The content should not simply regale the public with shenanigans surrounding the appointment of the 2014 board, the manner in which Brian Molefe and Mr Anoj Singh acted to assist the Gupta’s and ultimately former president Jacob Zuma, to unlawfully benefit from various Eskom contracts. Rather it should have lead to earnest self-reflection, mass action and debate within our Parliament.

Unfortunately, our daily press failed to report on the Zondo Commission Report in a manner befitting the gravity of the commission and the seriousness of its findings. One would have expected pages and pages, not simply columns narrating the facts in both chapter and verse to the public, alongside screaming headlines that characterised the 1977 Muldergate and Information Scandal which implicated then Prime Minister, B. J. Vorster.

The reduction of our paper-thin media to mere summarisation alongside anecdotal reporting and casual opinion, — where details and facts get lost under bullets and straplines, buzzwords and talk-points that essentially lead nowhere — is a minor tragedy of our age. The newsrooms which broke the Muldergate and Information Scandal are long gone. In their stead are paid sycophants, centralised editorial and lowered credibility.

It was only a matter of time before the bubble of public credulousness generated in this manner, would burst. All it took was for Eskom CEO André de Ruyter to spill the beans in a national television interview. Despite attempts by political commissars and conspiracy theorists on the ground to spin this story into a mere ‘tale of privatisation by stealth’, and worse, ‘right-wing posturing’, de Ruyter hit back with a damning Affidavit implicating the ruling party, and backed up by sworn statements by Eskom employees.

I encourage readers to listen to the audio below, in which a Daily Maverick journo refers to the cartels and a ‘territorial ruler’ currently under investigation.

<script async src=”https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js?client=ca-pub-1630578712653878″ crossorigin=”anonymous”></script><ins class=”adsbygoogle” style=”display:block” data-ad-format=”fluid” data-ad-layout-key=”-5c+cv+44-et+57″ data-ad-client=”ca-pub-1630578712653878″ data-ad-slot=”9120443942″></ins><script> (adsbygoogle = window.adsbygoogle || []).push({});</script>

Dear Mr Gordhan, Eskom is a ‘public bad’, not a ‘public good’

IN A PIECE published in the Daily Maverick, Public Enterprises Minister, Pravin Gordhan appears to respond to an earlier piece written by myself and published here and in the Cape Argus. The example of Telkom deregulation which I have raised, on more than one occasion, is most certainly taken verbatim, and it is no coincidence Gordhan’s response occurred on the day my piece was published by IOL.

Electricity may be a public good, but when the only source of electricity for the majority of South African households is a government department or City billing system, the results will always favour the producers not the consumers.

Peter Fabricious reports that Gordhan responded to a question put to the Financial Times Africa Summit on Tuesday on “why South Africa needed Eskom at all?”

He says: “A member of the audience put it to him that South Africa had been ahead of the curve in 1993 and 1994 in licensing mobile telephone companies and that had changed the country’s telecoms landscape.”

“Given that history of trailblazing, why do you need Eskom?” was the question for Gordhan, who was participating in the London summit remotely.”

To which Gordhan responds by doubling down on his party’s statist rhetoric, that “Eskom is necessary because providing electricity is a public good and the state should be involved in the provision of public goods.”

Gordhan then goes on to suggest without any evidence, that “placing the provision of electricity into private hands in other parts of the world had not worked out well, including because it had increased prices” and this by falsely listing Britain as an example. Either he is a willing idiot, or totally oblivious to the accepted wisdom and economic consensus surrounding the rise in UK fuel prices.

It is no secret that Europe’s plan to deploy natural gas as a ‘transition fuel’ has encountered a major setback and has run aground due to the collapse of the NordStream Pipeline resulting from the war in Ukraine. There is thus a major gas shortage, where 80% of the increase in UK electricity prices has been due to soaring gas prices, resulting from the supply-side market contraction. The Economist provides reasons for soaring energy bills based on projections on the basis of wholesale prices for natural gas, and the problem has nothing to do with privatisation.

Even in Costa Rica where private companies are being criticised for failing infrastructure following a natural disaster in a situation where the state has failed to regulate on service quality, there is broad consensus that the previous regime under a single state-run operator, was far worse.

Instead of deflecting our attention away from deregulation, by providing us with a reasonable timeline for private sector participation in energy-to-the-home (ETTH) and actioning upon plans already in place to split Eskom up into competing entities, Gordhan insists on trotting out effete intellectual arguments that lack any substance, save to satisfy his party’s bizarre insistence that maintaining the solitary energy SOE as a mechanism for sheltered employment to reward its union partners, is somehow a ‘public good’.

The results are plain to see.

Far from engaging the private sector in the provisioning of energy directly to consumers, our government is maintaining a false energy monopoly, in effect a pyramid scheme responsible for rolling blackouts.

A flawed scheme based upon a shibboleth, a custom or tradition, which essentially bars the independent sale of energy directly to South African households and which is anything but an ‘energy commons’, derived from a ‘national pool of energy’.

My earlier piece outlines why the inclusion of inputs from Independent Power Producers (IPPs) will have no direct impact upon consumers, given the massive Eskom debt (currently 400 billion rand), and especially if the resulting model continues to be driven by government diktat — socialist-motivated centralisation and bureaucracy-driven, command-style economics, instead of the free market.

Even if our government were to roll-over the entire Eskom debt, the modus of the SOE is so far gone down the road of welfarism and bail-outs, that we are flogging a dead horse and expecting it to run. “Between 2007 and 2021”, writes Drikus Greyling “Eskom invested R680 billion to increase its generation capacity. However, after this huge investment, Eskom produced less power than when it started.

Gordhan’s response to the Financial Times Africa Summit must be rejected as nothing more than empty rhetoric, elegant-sounding political words, entirely lacking evidence-based research and clearly statements not based upon any empirical inquiry. His pronouncements need to be called out for the dangerous obfuscation and mendacity they truly represent.

published in part by Cape Argus 28 October 2022

Flogging an Eskom dead horse? You’ve got it all wrong

SO LONG as this country myopically persists with it’s strange obsession in maintaining the Eskom energy monopoly, there will be load-shedding and blackouts. Consumers desperately require choices in energy provider, options on who can connect their home grid, to power the toaster and microwave oven. But practically nobody here is speaking out on the lack of consumer choice when it comes to electricity.

Its as if energy analysts are brainwashed morons flogging the proverbial dead horse, each year they call for inquiries into why the horse died, reclassifying the dead horse as ‘living impaired’, arrange for officials to visit other countries to ‘see how they ride dead horses’, call for additional funding and training to ‘improve the dead horse’s performance’, or the hiring of outside contractors to ‘ride the dead horse’, and so on, but are simply too afraid to ‘let go of the horse’, lest they be out of a job.

What is wrong with you people?

A decade ago I attended a talk by David Lipshitz, founder and CEO of MyPowerStation. A company which aims to provide a ‘virtual power station’ solution via online billing and provisioning of energy services to consumers. His magnificent idea of introducing information technology to the sale of electricity to the end-user and consumer, has been stymied by a regulatory environment which is more in keeping with a 19th Century model of distribution than the 21st century.

Lipshitz’s website is now merely a link to his book, The Last Blackout, available via Amazon.

“What would happen if city dwellers in cities with more than 1 million people suddenly had no electricity?” asks Lipshitz in an ‘electrifying, shocking, and powerful thriller’, that is too close for comfort. The past week has seen some areas of South Africa experiencing 9 hour blackouts. The weekend was a series of 6 hours of load-shedding for my own household.

South Africa’s model of energy distribution requires urgent and drastic intervention. And I don’t mean to re-engage the debate on where our electricity should be coming from in other words, how it is produced. Doing so merely adds to the pile of doggy-doo dolled up by consultants, analysts and self-proclaimed experts dished up on national television on a daily basis.

Whether or not, electricity is provided by the state, or Independent Power Producers (IPPs) is of no real consequence in a system in which the end-user is placed at the forefront. There are no rational reasons why consumers should not be given the choice of purchasing energy from sustainable resources, whether women-owned utilities, or listed companies with a high ESG and BEE component. Let the people decide.

Unfortunately, and despite the mooted plans to open Eskom’s grid to the ‘wheeling of energy’ by third parties, there remain a number of obstacles. The first is the fact that our government and especially its Marxist Energy Minister Gwede Mantashe, continues to embrace a blind focus on centralisation. You can read my piece on why the state is rooted in an ideological fixation, the problem of ‘Socialist Complexity’, and my proposal for an Energy Commons. I continue to believe a commons is a ‘way out of the debt trap’.

Eskom is heavily in debt and clearly unprofitable when it comes to the generation of electricity, and is a prime example of why governments and bureaucrats are less efficient than the market and free enterprise when it comes to allocation of capital. Which is why we continue to see the introduction of tariff increases several times over the inflation rate. Is more money really going to solve the problem?

Not when we have the bizarre situation in which our Muni’s and Metro’s, alongside the corner Cafe ‘prepaid token’ store, are all added to the game of profiting off the bulk sale of electricity, energy provided by a grossly inefficient pyramid scheme by a solitary, underperforming producer of electricity. Nobody is fooled by people like Cape Town mayor Geordin Hill-Lewis promising the City will bring new capacity online, give or take a megawatt, or our President Ramaphosa, racing home to declare yet another electricity crisis requiring a crisis committee.

Without actioning on our rights as consumers, rights enshrined in our constitution, we will be left in the dark. It is essential for Eskom to open up the grid, not only to the ‘wheeling of electricity’ but to the dealing and virtualisation of billing and provisioning of new services. Then we might take a cue from New Zealand where deregulation has proven incredibly successful.

The country has 5 major electricity generating companies. Genesis Energy, Mercury and Meridian Energy operate under a ‘mixed ownership model’ in which the government holds a majority stake, while Contact and Trustpower are private sector companies. The country once struggled with a system very similar to our own, before dumping a socialist government.

Sadly, despite promises, there appears to be no genuine enabling legislation nor incentives in South Africa to allow a third party to purchase electricity, from either the state or the IPPs, and to resell the result on the open, rather than captive market, to the consumer. This is clearly why our system is failing. Embracing Lipshitz’s modest proposal and learning from the example of New Zealand, would be a step in the right direction.

In fact one does not have far to travel, to examine the case of another state monopoly, to see why deregulation when it comes to South Africa is the only solution. The fate of Telkom, once the country’s sole cable monopoly, provides us with a good case in point. If we had not opened up, we would still have a situation in which the only telephone available, was from the same company, with a single color, beige. Left to its own devices (excuse the pun) Telkom would still be in the copper age.

Look at how Internet Services Providers (ISPs), just like IPPs began to emerge in the 90s, while our government to its credit allowed a semblance of competition (initially only in the mobile market). With the result these companies grew up and essentially outflanked Grandma Telkom. In the process provisioning fibre cable infrastructure to the suburbs, and FTTH, all of which cost the taxpayer not a single penny.

Given enough time, our IPPs might eventually begin rolling out similar infrastructure. In fact they would be negligent if they did not. Best to get Eskom into open competition mode as soon as possible. The alternative is living with a permanent threat of massive grid failure just around the corner, alongside a collapsed economy.

Published by Cape Argus 17 October 2022

<script async src=”https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js?client=ca-pub-1630578712653878″ crossorigin=”anonymous”></script><ins class=”adsbygoogle” style=”display:block” data-ad-format=”fluid” data-ad-layout-key=”-5c+cv+44-et+57″ data-ad-client=”ca-pub-1630578712653878″ data-ad-slot=”9120443942″></ins><script> (adsbygoogle = window.adsbygoogle || []).push({});</script>

Blame for the energy crisis needs to be placed fairly and squarely upon the failed ideology of the ANC and its coalition partners.

In many respects the ANC policies of Black Economic Empowerment (BEE) and its flipside Radical Economic Transformation (RET) resemble the policies of Nico Diederichs’ ‘reddingsdaadbond’ whose Nationalists of the 1940s viewed the state as the primary instrument whereby the Afrikaner capitalist would come to the fore via ‘volkscapitalisme’. Like so many socialist experiments, the ‘capital of the state’ was seen as synonymous with the ‘capital of the Volk‘, as the party mobilised for a ‘transformation of economic consciousness’.

Version two of ‘state capitalism’ in other words, government-directed economics (dirigisme) under the ANC, the proverbial ‘mixed economy’ has certainly turned into an abject failure. In the process ordinary South Africans — small businesses, patients in hospitals, commuters, and other categories of workers, are being sacrificed to accommodate what is essentially a Marxist fantasy.

One has merely to look at the huge cost overruns orchestrated during the building of the Medupi and Kusile projects, involving continual extension of catered lunches and free banquets for personnel. At the time contracts to feed workers were among the biggest catering contracts in the country, proving that providing a reliable source of energy was certainly never the game-plan. The projects have essentially turned into white elephants, considering the related climate factors.

Anyone who suggests otherwise, is living in cloudcuckooland or like so many political analysts, groomed on our nation’s campuses, armed solely with the tools of radicalism instead of data-analysis, fails to draw truth from facts instead, myopically deriving ‘truth’ from an ideological position.

Wherefore the Genie in the Gini?

A good example is the endless repetition and political cant involving the Gini coefficient. While the country may have a high score on the Gini Index a measure of the distribution of income across a population, which is cause for concern (a higher Gini index indicates greater inequality), continually harping on about this unfortunate statistic, fails to take into consideration other factors — for example, the country ranks relatively well on the human development index with a score of 0.705, above Egypt and Bolivia but just below Indonesia.

Unlike the Gini, the human development index is a ‘statistic composite index of life expectancy, education (mean years of schooling completed), and per capita income indicators’, which are used to rank countries into ‘four tiers of human development’.

Incorrectly suggesting that South Africa is effectively ‘under-developed’ or that life-expectancy is somehow on par with Chad or Niger, belies the fact that as an emerging nation, South Africa has a lot to be positive about and despite current difficulties with energy supply and the fuel price caused by failure to implement policy already in place, for example policy when it comes to biofuels (see below).

It is not all that difficult to see which aspects of the economy prospered under the ANC, and which parts continue to create an unnecessary burden on both the treasury and the taxpayer. Despite financial head-winds, those parts of the economy remaining in private hands are still in relatively good shape, with the country recording consecutive trade surpluses, R28.35 billion in May, and even modest growth of 1,9%in the first quarter of 2022, with many corporates posting a return to profit following the decline under Covid.

South Africa has a “mixed economy in which there is a variety of private freedom, combined with centralized economic planning and government regulation” according to website GlobalEdge. It is this structural centralisation and focus on market intervention as opposed to Keynesian, social democratic welfarism, ‘based on the social rights of citizenship‘ which has received criticism from the World Bank and other aid agencies.

Far from providing for its primary mandate, Eskom and Transnet have become nothing more than massively costly exercises in sheltered employment for the party faithful, requiring efforts to trim down a bloated workforce. In both cases, these parastatals were used to siphon money into the pockets of Jacob Zuma and his cronies and are the subject of a 5 volume report into corruption.

Fuel or Fool?

Analysts continue to dress up the ANC and its SACP/COSATU “RET faction” ambitions of “transformation of economic consciousness” with phrases like “the working class” and “means of production”, essentially promoting failed economic policies — policies that are at the heart of the nation’s perennial inability to drive growth and economic expansion.

In 2019 cabinet approved a ‘biofuels regulatory framework‘ mandating blending regulations, feedstock protocols, subsidy mechanisms, selection criteria for projects, licensing of product storage and blending facilities, and containing environmental, water use and land use approval mechanisms.

The legislation was published by the Government Gazette and approved by Cabinet on 13 December 2019, this after some two decades of debate on the topic, including input from the environmental justice movement. By all measures the country should have been amply-armed and primed for the current global fuels crisis. Similarly plans to restructure and unbundle Eskom were proposed as early as 2015 and an energy roadmap released in 2019, so what happened?

Instead of embracing the constitutional imperative of sustainable development our Minister of Energy Gwede Mantashe took us all on a wild goose chase in the quest to mine the ocean for gas, promoting dodgy Karpowership deals, fossil fuel, nuclear power and big coal. Instead of embracing a just transition and change at Eskom, unions dug in their heels. Instead of seeking out environmentally-friendly alternatives and demand-side reduction, we are involved in the intrigues of Russia’s Gazaprom, the closure of refinery capacity and the collapse of the national power grid. We are all paying for it at the pump, and at the electricity meter.

Though the apartheid-era steel monopoly ISCOR was sold off to Mittel, and the telephone monopoly Telkom was listed in the face of competition from mobile providers, the government retained monopolies in rail transport, sea ports, energy generation and distribution, in other words Transnet, Portnet and Eskom.

The results are plain to see. Our government’s stake in listed entities like Sasol (8.4%) have outperformed its troublesome direct holdings — state-run enterprises have thus fared dismally — demonstrating why markets are more efficient at allocating capital than governments, and essentially represent the lesser of two evils insofar as our development path is concerned.

Note: There are currently over 700 state-owned entities dependent upon the treasury.

(You can read one of my earlier postings on this subject here)

SEE Volkskapitalisme: Class, Capital and Ideology in the Development of Afrikaner Nationalism, 1934–1948

Socialist complexity at heart of Eskom’s problems.

WHEN Medupi and Kusile were announced by our government in 2004 and 2007 respectively, the two coal-fired mega-projects were both seen as emblematic of South Africa’s democratic progress —  key to the ruling alliance and its plans for the future.

The ruling labour-left coalition was at the height of its power. With its roots in the victorious anti-apartheid struggle, it had made no secret of its desire for a ‘mixed economic model’, in which a socialist command economy would prevail alongside the capitalist economy, and where the energy sector, would imitate policies from the days of the former Soviet Union. What could possibly go wrong?

According to Pretoria technocrats, a new era of cheap coal would herald in cheap and plentiful electricity with which to ‘build the nation’. Both consumers and workers would benefit. The latter from long-lived and extended public works programmes centred around coal, which in turn would drive salaries and feed households which had experienced some of the worst ravages of apartheid ‘separate development.”(1)

Thus it was that these two projects ballooned into costly engineering exercises, as complexity driven by the technocrats, bureaucrats and party officials, armed with Marxist texts and presidential directives, ruled the day. That Marxists tend to overtheorise economic problems, relying upon ideas such as ‘dialectical materialism’ and the ‘labour theory of value’ to arrive at their conclusions, in effect the triumph of ‘ideology over pragmatism’, has already been remarked upon.

What has not been said in the mainstream media is the manner in which unions such as COSATU, emboldened by socialist think-tanks such as the AIDC whose research is anything but lopsided (2), and with a culture of intolerance for differences in opinion, quixotically feed unemployment, climate change and the national debt. While the rest of the world is moving away from coal, South Africa’s coal ambitions have instead risen and include plans for at least several new coal plants such as Thabametsi, each one able to take our country into poll position as one of the top GHG emitters in the world.

Eskom’s coal-fired power plants persistently and significantly violates the air pollution limits in its licences.

“The main cause of its troubles” say Adjunct Professor Rod Crompton, is Eskom’s decision “to build two of the biggest coal fired generating plants in the world, (Medupi and Kusile). These plants are running way behind schedule, they’re over budget and the bits that are complete don’t work properly. They are probably the single largest disaster in South Africa’s economic history.”

Medupi is literally drowning in ash. The result of socialist bureaucrats implementing design changes via committee without sufficient input from scientists and engineers, whom they invariably ignore. This lack of concern for evidence-based research and scientific methodology in favour of ‘political education’ is not a new one, witness the failed Afro 4000 train debacle .

An editorial published by Engineering Weekly for example, debunks concerns from COSATU and others, surrounding loss of jobs due to renewables, and yet the union continues to demand a state-owned power utility on steroids, with little concern for loss of jobs in the broader economy and the tragic impact upon the livelihoods of those affected by outages and inefficiency.

“There is considerable support in South Africa” says Tobias Bishof-Niemz  for the notion that a transition in the electricity system from coal to renewable energy will trigger a jobs bloodbath at both Eskom and the Mpumalanga coal mines. A detailed analysis of the job numbers, however, suggests quite the opposite. In fact, it points to there being at least 30% more jobs in a fleet comprising solar photovoltaic (PV) and wind farms when compared with an energy-equivalent coal fleet”

Meanwhile the brazen union federation staged a protest march this week, in response to the President’s plan to unbundle Eskom, in effect calling for Eskom and its mounting debt, to be supersized. Unbundling alone may not be enough to offset the crisis. Creating completely separate, independent and regional power utilities able to compete with each other would have a better chance of survival.

NOTE:

(1) See Rudzani Mudogwa’s recently published defense of coal which relies heavily on  statements made by Gwede Mantashe.

(2) An article doing the rounds in the local press  purporting to be by “Dr Sweeney, an AIDC visiting researcher, with the City University of New York’s ‘School of Labor and Urban Studies’,” claims splitting up Eskom ‘will result in privatization’. If one follows the logic of the argument presented, it is the West (including NY City) that is in the grip of rolling blackouts and massive debt run-up by Energy Companies since they were unbundled from the State. No citations, case examples nor evidence is provided by the ‘researcher’.

Medupi alone is a R145bn disaster

Liberalism’s ideologues and their coalfaced discontents 

Socialism under the ANC begat state capture, graft, corruption …

THAT IT would all go so horribly wrong for the African National Congress is best demonstrated by comments made by Moletsi Mbeki on national television. The ANC he says is really a conglomeration of competing, ‘factions acting in their own self-interest’.

What unites the party, aside from its competing sectarian and nationalist aims, is its avowedly ‘socialist character’. Problem is, wherever socialism has been tried in Africa, it has failed. Whether Tanzania under Nyerere, or Ghana under Kwame Nkrumah, South Africa’s experiment with socialism and the so-called ‘mixed economy’ under the ANC has fared no better.

While a successful roll-out of a social wage, has arguably made the ruling party, the envy of the rest of Africa, the word socialism itself, does not appear in the party’s constitution as such.

Socialism so far as the ANC is concerned, and as its policies demonstrate, has more in common with the socialism (or volkskapitalisme) under the former white Nationalist regime, than multifarious examples across the continent. In both instances, economic policies aimed at reducing inequality (in the latter example, the inequality experienced by poor white Afrikaners) ended up unfairly benefiting the party faithful — well-positioned insiders who sought to ‘take control of the commanding heights of the economy’, and who in turn created opportunities for graft, self-enrichment, maladministration, corruption and ‘state capture’.

of the Free Market Foundation argues “corruption is a feature and not a bug of socialism. Every socialist system is guaranteed to have a high level of corruption.

“The reason why a socialist system can never work” says i  “is the trade-off that has to happen at the heart of it – individual liberty in exchange for more power given to the state.” The fatal flaw inherent to party centrism and a dominant government promoting statism, (read ‘economic intervention’ via ‘state-owned-enterprises’) — has been endless bureaucracy, fruitless and wasteful expenditure and a never-ending litany of corrupt officialdom.

The latest revelations from the Zondo commission paint an appalling picture of a socialist-leaning administration in which political bribes of well-known politicians, cabinet members and officials have become the order of the day, and not merely during the tenure of Jacob Zuma but also under current and prior administrations and thus grand larceny by, and on behalf of, socialists — ideologically-driven corruption which continues to manifest under the Ramaphosa government.

The Bosassa debacle comes after the revelations of the VBS bank saga, and the 2018 indictment of former president Zuma on corruption charges. For analysis of the impact on the economy, one need look no further than the corruption scandals plaguing South Africa’s SOEs in effect all ‘State-owned bureaucracies’.

Eskom on its own has created a massive and embarrassing debt bubble, which risks upsetting the entire economy, and whose economic fallout is still being bankrolled by consumers locked into demands for annual 15% pa rates increases. Latest figures, show a massive impending R100bn bailout by treasury.

The central party, unable to deliver coherent economic policy, hamstrung by unions hooked on fossil fuels, oil and gas cartels, and equally inept socialist partners, and compounded by the perceived need to reign in a boisterous far-left opposition grouping, has resorted to ‘lekgotla‘ after lekgotla‘, each one promising action.

A party plenary held over the weekend, promised to finally to breakup the state power supply entity into competing parts, all begging the question as to why a lot more was not accomplished in the past 25 year of ANC rule to boost efficiency, and at very least avoid the current dire situation?

SEE: Defend South Africa’s Social Wage

Terror Lekota’s brave step towards a rational energy debate

COPE leader Mosiuoa “Terror” Lekota took a brave step forward to putting his party on a new economic platform, warning on Sunday that South Africa faced the risk of the economy collapsing if the government persisted with its model of running Eskom, “just as the Soviet Union and other socialist governments in eastern Europe experienced in the 20th century”.

Echoing Medialternative’s own analysis of the energy problem, Lekota said:” If you look into our economy, you will see that we are called on to contribute money to Eskom, instead of Eskom generating money to us. That’s what collapsed Soviet Union and that’s what collapsed Russia, China and eastern Europe, because they ceased to generate profit and fell behind,”

FULL STORY HERE