News and updates from the continent

Mistake to privatise Eskom – Minister of Public Enterprises

Mistake to privatise Eskom – Minister of Public Enterprises

Aug 6, 2014

Leading South African business newspaper Business Day  reported on Tuesday 5 August 2014 that a team of Cabinet ministers and government officials were looking into the restructuring of Eskom’s business, which included selling some of its power stations to private investors.

However, Minister of Public Enterprises Lynne Brown was quick to respond, saying that any debates on the privatisation of Eskom were “misguided”, as Cabinet had not discussed privatisation of Eskom.

“I want to indicate that there is a portfolio of options for the inter-ministerial task team to consider. To my knowledge, Cabinet has not discussed the matter of privatisation and there is no need to unnecessarily raise temperatures around this matter,” Brown said in a statement.

Business Day said that options being discussed by the ministerial team representing energy, public enterprises and the treasury, have not been made public, and Brown told the newspaper it would be “premature to make pronouncements until completion of the process”.

A chief executive for Eskom would be appointed shortly to advance discussions on Eskom’s “end state,” according to the publication. Minister Brown is adamant, though, that privatising Eskom would be “a mistake”.

“Eskom is critical for government to implement its developmental agenda. It would be a grave mistake to privatise this critical player in the economy,” she said. In late July, Eskom had told MPs that it faced a R225 billion revenue shortfall, partly as a result of being granted lower-than-expected tariff increases by the National Energy Regulator.

The power giant has been asking for an equity injection of at least R50 billion to solve its cash-flow problems.

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