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Special Cabinet Committee on Eskom Set Up

February 15, 2019

The Presidency

A Special Cabinet Committee on Eskom has been set up.

President Ramaphosa announced this during his response to the debate on the 2019 State of the Nation Address.

The committee, under the leadership of the deputy president, David Mabuza, consists of the Public Enterprises, Energy, Finance, Transport, Intelligence and Police ministers.

It will provide the president with daily reports on what actions need to be taken to secure energy supply.

The president declared that there is no single solution to Eskom’s problems.

“There is a no single solution to the problems at Eskom – neither restructuring, nor refinancing, nor cost cutting, nor tariff increases, nor better plant maintenance on their own will have the necessary effect,” he said.

The president added that measures that government will take to help Eskom stabilize its finances will be detailed in Budget 2019.

Financial assistance will need to be coupled with a “credible, far-reaching turnaround plan that has both an immediate and a lasting impact”.

The president also highlighted the importance of maintenance in ensuring secure electricity supply.

“Maintenance doesn’t grab headlines, nor does it strike most people as even vaguely interesting, but an effective comprehensive maintenance programme, properly funded and led by skilled personnel, is the one thing that stands between reliable electricity supply and darkness,” he said.

The president emphasized that the response to the Eskom crisis must be inclusive and consultative involving all stakeholders.

In terms of the proposal to unbundle Eskom into three separate entities – generation, transmission and distribution – the president asserted that it was not a path to privatization.

“Restructuring will reduce the risk of a massive Eskom, that at times has in its current form, been termed too big to fail, placing Government in a position where all its eggs are in one basket.”

The president also holds the view that restructuring will align Eskom with international electricity trends, ensure energy security, increase transparency and decentralize management.

As regards climate change, the president confirmed that the Draft Climate Change Bill was being finalised.

The draft bill was published for comment in 2018.

It seeks to build South Africa’s effective climate change response and the long term, just transition to a climate resilient and lower carbon economy and society in the context of an environmentally sustainable development framework.

The president declared that government needed to “act with greater urgency to respond to the effects of climate change and make our contribution to preventing it”.

Shifting his attention to health matters, the president reiterated that government remained on track to finalise the Draft National Health Insurance Bill for tabling in parliament.

He highlighted the contribution that NHI can make to the principle of social solidarity.

“Once fully implemented, the NHI will bring to life the spirit of human solidarity where – through the principle of cross-subsidisation – the young subsidise the old, the healthy subsidise the sick, and the rich subsidise the poor,” he said.