Posted on October 2, 2010


Using statistical sleight of hand and a smokescreen of misleading rhetoric, Eskom and the government have created the impression that they are not responsible for the energy crisis; that a combination of wasteful consumers and forces beyond their control created the mess we are in. And that mess, in turn, justifies the massive increase in tariffs that has now been agreed by the National Energy Regulator.

“Which is all nonsense. The responsibility for the entire mess rests with Eskom and the government,” says National Council of Unions (Nactu) president Joseph Maqhekeni. “We are not going to pay when the fault rests with the state.”

His views are echoed throughout the labour movement where consensus exists that bungling, short-sightedness and lack of planning on the part of the electricity utility and the government are at the root of the energy crisis.

This has brought to the forefront again the question of nationalisation, following the Eskom complaint that the high coal price is one of the reasons for added costs and and higher tariffs. The idea that Eskom should pay import parity prices for locally mined coal is seen as nonsensical.

It is put on the same basis as the fallacious argument about the country having “the cheapest electricity in the world”. As Cosatu spokesperson Patrick Craven points out, this frequently repeated official mantra is a myth. It was created by converting the cost of local electricity into US dollars and then comparing it with countries such as Denmark and the United States.

When like is compared with like — when costs, household incomes and prices are assessed in rand terms — South Africa certainly does not provide the cheapest electricity in the world.

“Besides, the electricity tariffs were set in a way that made the ordinary consumer pay more while the big companies paid less,” says Craven.

This is now leading to demands that Eskom declare how much the energy guzzling aluminium smelters at Hillside and Bayside in KwaZulu-Natal and the Mozal smelter in Mozambique pay for their electricity and how much these plants really contribute to the domestic economy.

The unions fear that the government and Eskom are again acting in an ad hoc manner; that they are preparing to take another disastrous step in the wrong economic direction. An urgent rethink is being called for.

Says Nactu general secretary Manene Samela: “There is still the opportunity to call a meeting of all stakeholders to address this issue and to shift this burden to the state.”

As the unions see it, the financial burden resulting from the crisis belongs with the state, which is both largely responsible for the problems and which has the wherewithal to fund the necessary infrastructure. “Because[the government] is cash flush, we are calling for a grant to Eskom, not a low-interest loan,” says Craven.

Maqhekeni agrees. “Trevor [Manuel] has a surplus. Why does he save it at the expense of poor people?” he asks.

Federation of Unions (Fedusa) general secretary Dennis George also questions why Eskom’s infrastructure cannot be financed by a government that could find R15 billion to finance the unproven technology of the pebblebed modular reactor.

These are matters the unions want urgently to discuss in order to find what some have referred to as “a sensible and holistic approach” to the power crisis. This would involve the drawing up of a comprehensive industrial strategy which many of the unions feel will involve elements of nationalisation.

Says George: “It s nonsense that the market will sort things out. A massive increase in electricity tariffs will affect just about everything else.”

And so the unions prepare to protest, not so much against the proposed increases in the cost of electricity, but for a set of policies that would make such increases unnecessary.

Posted in: Archive - 2008