Gordhan greenlights unbundling of Eskom – What does this mean?
The National Union of Mineworkers (NUM) says the unbundling of Eskom paves the way for privatisation and will not solve SA’s energy issues.
Department of Public Enterprises Minister Pravin Gordhan has grant Eskom board permission to go ahead with the unbundling of Eskom.
To reverse the power utility’s current predicament, government announced drastic interventions, ranging from addressing debt to operational matters.
In his State of the Nation Address in 2019, President Cyril Ramaphosa announced that Eskom would in the near future be split into three entities focusing operations, distribution and transmission.
UNBUNDLING OF ESKOM GOES AHEAD
In a letter dated 7 August 2023, Gordhan after considering the Public Finance Management Act (PFMA) application, he approves the Eskom sale of Distribution Business to the newly formed Distribution Company as per the Roadmap for Eskom in a reformed electricity supply industry.
“Eskom is requested to expedite all activities for legal Separation of Distribution and Generation companies. The entity must provide a quarterly progress report on legal separation of Transmission, Distribution, Generation companies,” Gordhan said.
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UNION REACTS TO LATEST ANNOUNCEMENT
The National Union of Mineworkers (NUM) said it is angered by Gordhan’s decision to go ahead with the unbundling of Eskom.
NUM accused Gordhan and Eskom of implementing the decision without consultation with key stakeholders such as unions and the public.
“The unbundling will not save Eskom from declining revenue, escalating debt, escalating primary energy costs and a realistic plant maintenance program..the NUM further notes that the decision to unbundle Eskom is the first step towards privatisation,” the union said.
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