It is now time for the government to stop making nice cakes about the situation at Eskom and instead start taking action by no longer being an obstacle in alleviating the electricity crisis but rather an enabler.
“The government blames corruption, state capture and now also the private sector for load shedding and the electricity crisis. In the meantime, the government appeases all role players with various promises and initiatives, but there are dates coming from that,” says Rudolph Janse van Rensburg, portfolio analyst at Everest Wealth.
In last week’s court ruling on load shedding, it was not only confirmed that it violates several constitutional human rights, but also that there is uncertainty regarding the content and timelines of the government’s power plan. This comes amid ongoing phase 6 load shedding and talk of even higher phases and a difficult winter ahead.
The government encourages households and businesses to launch power projects and urges the private sector and investors to intervene, but then makes it extremely difficult with its policies, legislation, regulations and red tape.
“It is time for the government to really enable other actors to step in by providing clarity, removing barriers and implementing its ideas and plans. Meanwhile, those who are able to do so become independent of Eskom as much as possible and the private sector does intervene with new power projects to encourage private power generation.”
Meanwhile, conflicting statements and promises about when load-shedding may come to an end and the extension of coal-fired power stations’ lifetimes, as well as reports of infighting between ministers and questions about the electricity minister’s power lead to more political uncertainty that deters investors.
“If the government doesn’t get its own house in order and start speaking with one mouth, it will continue to scare away investors. This requires robust policy and a transparent legislative framework that will instill confidence among investors and give the private sector the opportunity to do even more in order to solve the electricity crisis.”
Beurtkrag not only causes unprecedented inconvenience, but has a huge effect on the economy. Due to increased costs and hampering job creation, economic growth and investment, business profits are being squeezed.
“The government must show that something is actually being done about all the problems such as corruption, poor maintenance, repairs and the protection of infrastructure. There must be tangible outcomes from his energy plan, as well as evidence of progress being made,” says Janse van Rensburg.
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