The National Union of Metalworkers of South Africa (NUMSA) condemns the board and the executive of Eskom for continuously subjecting the country to relentless loadshedding. The Eskom executive management and the board keeps demonstrating that it is clueless when it comes to resolving this crisis. They are absolutely CLUELESS. We must stress this word because we have noted that the dominant narrative in the media is to defend the Eskom management even though their incompetence is so glaringly obvious. Andre De Ruyter’s qualifications and work experience have not prepared him at all for the role of Eskom CEO and he keeps demonstrating his inability with every stage of the loadshedding announcement. There has never been a CEO who has failed as spectacularly as De Ruyter has failed in the short time that he has been leading Eskom. When De Ruyter started at Eskom he promised the nation that he would end loadshedding within 18 months. He has failed to uphold that promise. Eskom’s energy availability is the lowest it has ever been in history of the organizations existence. As a result, the economy of the country is in the ICU and yet, bizarrely, when NUMSA and other organizations call for his dismissal, there are some in the media, particularly so-called ‘energy experts’ who passionately defend him and there is an absolute refusal to hold him accountable for his failures.
If we wish to see the biggest difference at Eskom Pravin Gordhan, the minister of Public Enterprises must also be fired. We have noted how Gordhan attempted to re-write history in an interview with Xoli Mngambi on Newzroom Afrika this week where he falsely claimed the problems at Eskom were ‘inherited’ by his administration. The facts do not back this up. Gordhan was appointed as minister of Public Enterprises in February 2018 and at that time the Eskom Energy Availability Factor was at 78%. The following year it had dropped sharply to 69,95% and it has been dropping sharply every year ever since to where today it is at a shocking 59%. Pravin cannot fix anything! NUMSA has consistently said he is a SOE wrecking ball based on the state of Denel, SAA and it subsidiaries and SA Express, and nothing will change as long as he is in charge of State Owned Entities.
We must ask ourselves whose interests are advanced when Clueless De Ruyter is allowed to continue to lead Eskom down a path of destruction. It has become very clear that his failures feed into the overall strategy to intensify and speed up the privatization of Eskom. This is why we say that De Ruyter’s incompetence is helping to drive the agenda to privatize Eskom. The more he fails, the faster the process of privatizing Eskom will be and the greater the involvement of the private sector will be in energy generation. This is ultimately Pravin’s agenda. His goal is to collapse Eskom, like he collapsed SAX so that the private sector can take over the role of energy generation. He has already achieved this at SAA where the airline was privatized and sold for a mere R51 in a dodgy deal to the Takatso consortium, which has ties to the ANC leadership elite. Ever since SAA was privatized the cost of flying domestically has skyrocketed because the private sector is dominating. The same fate awaits Eskom.
One thing is for sure, NUMSA has been vindicated. In July workers were scapegoated and unfairly blamed for frequent loadshedding for participating in protests against Eskom’s selfish behaviour during wage talks. We are experiencing the same shocking levels of persistent loadshedding and there are no protests this time. In December 2019 President Cyril Ramaphosa cut short a presidential trip to Egypt when we reached stage 6 loadshedding. He claimed that Eskom had been sabotaged – a claim which was never proven. This is evidence that the only people who have been consistently sabotaging Eskom are the executive management and the board. This is why NUMSA continues to call for the removal of De Ruyter and the board of Eskom for sabotaging the South African economy, and we continue to call for Pravin to be removed.
NUMSA has also noted the statement issued by Eskom on the 19th of September titled, “Eskom launches Power Purchase Programs to secure 1000 MW to bolster constrained generation capacity”, where Eskom states that it intends to procure additional power to the grid. In the statement Eskom intends to procure power through the Standard Offer Programme, The emergency Generator Program and the Bilateral Power Import Program. These programs are clearly designed to intensify the role of the private sector at Eskom. The Standard Offer Programme allows Eskom “to purchase electricity at an established price calculated at the avoided cost of own generation (including long term energy purchases from independent power producers)”. The same with the emergency Generator Program which allows Eskom “to procure more expensive power during periods when the grid is significantly constrained from independent generators”.
This announcement ties in with the earlier announcement made by President Cyril Ramaphosa in June of 2021 that the private sector would be allowed to self-generate 100MW of electricity.
NUMSA has consistently said that loadshedding is being used to justify privatization and we have been proven right. In an op-ed titled “Unnecessary loadshedding used to justify Eskom restructuring and its eventual demise” published by the NUMSA General Secretary Irvin Jim, in June 2020, NUMSA says that the ANC government has given up on Eskom. Comrade Jim goes on to say that Eskom’s role will continue to shrink in favour of the private sector;
“Consequently, Eskom has no scope for growth going forward. Eskom will shrink and in the future creative ways will be found to retrench workers. In terms of the IRP 2019, over 12 000 MW of Eskom installed capacity will be decommissioned between 2020 and 2030 and there is no indication that Eskom will be awarded new generation capacity through the Ministerial Determination. We foresee an Eskom Lite by 2030 and it is not our view that privatisation is on the agenda for Eskom generation assets at least in this decade.”
The Power Purchase program proposed by Eskom is nothing but an attempt by President Cyril Ramaphosa and Pravin Gordhan to pull the wool over our eyes. South Africa needs a sustainable and reliable energy baseload, and that’s the starting point. You cannot power the economy on renewable energy. The current fleet of power stations is capable of delivering that capacity. The problem is that there is no appetite from Eskom, Pravin and Cyril to maintain the coal fired fleet due to calls by privately owned renewable energy companies to dismantle all of them without a viable solution.
We must also ask who is benefitting from load shedding? How do you explain the fact that in the past 6 months, Eskom has burned diesel worth R7.7bn, and we must accept that this is normal? This is definitely not normal. The cost of diesel is part of the basket of bloated costs which Eskom is saddled with and which the executive refuses to intervene on. Primary energy costs including diesel costs have been escalating at an alarming rate with little or no intervention from Eskom management or the board. This smells of corruption and we will continue to expose them for failing to act on this. At the same time, we are currently paying more for electricity today, in part, because of the exorbitant costs of Renewable Energy Independent Power Producers. The cost of electricity is higher because the cost of REIPP’s are passed onto the consumer and this will only increase as the role of the private sector increases.
What is to be done?
The fastest way to solve this problem is to replace Clueless De Ruyter with a competent CEO who understands Eskom and who understand why plants are breaking down. De Ruyter and Jan Oberholzer the COO have no idea what they are doing and this is why they have no idea how to solve the problem. From the time they were appointed they have failed to meet energy Availability targets set by the board and the EAF has dropped from 78% in 2018/19 to 59% today. Any other company would have fired its executive for failing to meet their KPI’s therefore why are De Ruyter and Oberholzer allowed to keep their jobs?
Secondly, rolling out more renewable IPP’s will not solve the problem. Renewable energy is not a sustainable form of energy to power an economy. Solar for example depends on the sun and when there are outages in the evening, it is not available to kick in and supplement the grid, it is an intermittent form of energy. That means we will still need coal or nuclear to drive the economy. The Eskom system operator 2021 expressly states, “improve plant performance fleet as this remains the largest lever to restore system adequacy by expediting the Reliability Maintenance Recovery Program to improve predictability of performance in the future”. What this means is by Eskoms own assessment, the fastest solution to ending loadshedding is to fix the current coal fleet which we have. We have been failing to fix the fleet because we are led by a clueless team of Eskom executives who have no idea how to execute this work properly.
Privatizing energy generation will not solve our energy crisis. Privatization results in massive job losses and increased costs for the consumer. At least 300 thousand jobs are going to be lost in Mpumalanga when Eskom coal fired power stations are closed, in favour of the privately owned renewable IPP’s. We will continue to flag this looming crisis which the ANC government wishes to ignore and which it has failed to mitigate against. Privately owned energy providers do not care about economic growth, or care about ensuring access for the majority of the population, so the majority of people will continue to be excluded from accessing electricity because they will not be able to afford it. The mandate of the private sector is profit and a profit motive will not dig us out of the crisis we are in.
Issued by Irvin Jim
NUMSA General Secretary
For more information, please contact:
Phakamile Hlubi-Majola
NUMSA National Spokesperson
0833767725
NUMSA Head Office number: 0116891700
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NUMSA Twitter account: @Numsa_Media
NUMSA Website: https://numsa.org.za/