Tagged: Eskom

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.”

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 (1), 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.

“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) 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 

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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