Unfortunately for our ‘statistician general’, Eskom maths just doesn’t add up (updated)

AVAILABILITY of electricity in South Africa is now at its worst in living memory. Prices are skyrocketing, tariffs are set to increase by a whopping 18.65% and the ruling party is hamstrung by its inability to unbundle Eskom into separate units. This at the same time as government insists on maintaining a facade, that the SOE will be able to provide for the entire nation’s energy needs moving forward.

Instead of examining the facts and figures, Dr Pali Lehohla, former Statistician General of South Africa, delivered a media sermon over the weekend, one whose message is painfully against privatisation and consumer choice. His comments reported by IOL, lack statistics, facts, figures, nor percentages. There is not a single prime number in a piece which rattles on about the President ‘being in the war-room’ to defund Eskom by ‘not funding maintenance in order to promote privatisation’.

Instead of examining the massive debt balloon run-up by Eskom over the course of the past decade (R401. 8 billion 2021, R396. 8 billion 2022), fruitless and wasteful expenditure compounded by tender fraud, unlawful contracts, R659 million lost in 2016 alone to a coal scam, alongside decreasing availability, (as if there were no maths problems here worthy of his academic qualifications), Lehola insists on misdirecting the public with a red-herring regarding the issue of maintenance of what is left of Eskom’s ageing fleet.

At the beginning of December, writes Ketshepaone Modise of Earthlife Africa, only 52% of Eskom’s fleet was generating electricity, and by the end of that month, the figure slipped below 50% for the first time. This means that of 48,000MW of potential capacity, less than 24,000MW was operational.  The entity posted almost a R12 billion loss for the year ended 31 March 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

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Conspiracy theorist Sizwe Dlamini is at it again

NO SOONER had ‘investigative reporter’ Sizwe Dlamini, of the Independent Group’s self-styled ‘falcons’ investigation team, erroneously claimed that he had exposed Branko Birkic’s Daily Maverick, for being, (wait for it), a ‘newspaper with subscribers’, the conspiracy theorist was railing against the Institute for Race Relations (IRR) for its backing of online site, Daily Friend.

Dlamini’s latest exercise in yellow journalism proceeds at the outset to laud IRR for being ‘guardians of liberal values in South Africa” before embarking on what could also be termed an ‘agit prop conspiracy piece’ attempting to discredit the conservative thinktank for being a ‘neo-liberal’ organisation funded by the US State Department.

You can read his earlier missive here.

Neither the common dreams article referred to by Dlamini nor another piece by the same key author Roscoe Palm mention IRR and the Daily Friend. Rather these pieces pillory the National Endowment for Democracy (NED and Open Society Foundation (OSF) and their alleged support of 24 news organizations within the country, including Mail and Guardian and the amaBhungane Centre for Investigative Journalism.

It should be noted that the authors Palm and former Congress of the People, (Cope) organizer, Philip Dexter, are co-founders of the Pan African Institute for Socialism and cannot claim to be objective reporters.

amaBhungane have issued strong denials of any support from USAid and its Micah Reddy has taken “issue with a number of claims and suggestions made by the authors” calling the article a “demonstrable lie.”

Sam Sole of amaBhungane responds: “Although the article purports to be an analysis of a real phenomenon, it is actually an attempt to manufacture a moral panic without disclosing the origins of the debate or the involvement of one of the authors, Roscoe Palm.” You can read his full response here.

Journo Chris Roper is also outed as an alleged CIA funded-agent by Palm (any comment’s appreciated).

It would seem patronising to suggest as Palm and Philip Dexter do, that other organisations such as News24, which are amply funded due to their connections with former Nationalist Party oligarchs, and which have long since been exposed here for involvement in government kickbacks like the notorious MNet pay-tv deal, require any foreign aid, if at all. In fact the obvious failure to tackle my own revelations, and case, lead one to conclude there to be an obvious agenda flowing from the obfuscation and removal of the primary context of apartheid.

The links to the American State Department presented are tenuous at best and seem drafted to coincide with the recent visit by Secretary of State Athony Blinken amidst a fracus over Taiwan and Ukraine.

The NED association with Ronald Reagan’s purported covert operations against Nicaragua in the 1980s and thus by implication, the work of US intelligence agencies such as the CIA, are used by Palm and Dexter as broad brush strokes, harking back to the Cold War, and thus a convenient bogeyman with which to smear progressive and conservative media alike.

It is clear that both Dexter and Dlamini view anyone vaguely to the centre of the far-left as compromised. Critics of ultra-left factions trumpeting ‘Radical Economic Transformation’ and ‘Expropriation without Compensation’, are thus according to these self-appointed spokesmen for Socialism, nothing more than dangerous counter-Marxists. Committed capitalists, who if parties like the EFF were to attain power, might need to attend compulsory political re-education camps, or face involuntary psychiatric confinement, as do Cuba’s own dissidents.

One should again note the weird contradiction in logic displayed by Dlamini, for at once praising liberalism before engaging in a critique of neoliberalism, which in many respects could also be a criticism of government regulation and Keynesian economics, if only it weren’t a tired scholastic segue, one tediously proposing a fundamental reorganisation of society along Marxist-Leninist principles.

Independent Media is the daily news outlet which continues to stand by a thoroughly discredited multi-baby story, (babygate) and which has found itself in a battle to maintain its banking facilities, this after various banks deemed Executive Chairman Iqbal Surve, a ‘reputational risk’. Clearly a company out to get other media outlets with which it disagrees, and then calling foul when placed on the receiving end of serious criticism whose outcome is of no small consequence?

Next up: South Africans have unwittingly been watching American movies for decades. Better alert the press.

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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?

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