News24.com | 'Irrational and disastrous': DA slams proposal to move Eskom to Mantashe's Ministry of Energy

Minister of Minerals and Energy Gwede Mantashe.

• The DA has warned against moving power utility Eskom back into the Energy Ministry.
• The party says there is an obvious conflict in an energy ministry being Eskom's shareholder while also overseeing competition and regulation in the sector.
• An ANC resolution will see some state-owned entities moved out of the Public Enterprises.
• For more financial news, go to the News24 Business front page.

The Democratic Alliance has slammed an ANC plan to move Eskom away from Public Enterprises and into the Ministry of Energy.

"The DA is implacably against this move and will fight it, tooth and nail, with all the levers at our disposal," said Ghaleb Cachalia, the opposition party's spokesperson on Public Enterprises.

Last week the ruling party concluded its 55th National Conference, where it resolved that state-owned companies in specific economic sectors should be overseen by their relevant government departments. This means that troubled entities such as Eskom and Transnet would move to the Department of Mineral Resources and Energy, and the Department of Transport respectively.

There is a mandate 

President Cyril Ramaphosa this week said the resolution was a clear mandate from ANC members and would be implemented. In an interview with Newsroom Africa, he said: "like all other resolutions, we need to look at them very closely … we need to look at the efficacy, the timing and everything else. The resolution will be implemented, but [we] need to look at a whole number of things [like] regulatory processes… it's not easy. "

In a statement, Cachalia said there is an obvious conflict of interest in an energy ministry being Eskom's shareholder while also having responsibility for competition and regulation in the sector.

"There is a clear and present danger that if this happens, Eskom will never be fully unbundled – as is necessary. Moreover, it will retain its dominant market position, and the envisaged open power exchange and market will not, in all probability, be implemented," he said.

"Private investment will be pushed to the back burner and … corruption, and load shedding will flourish again. The move also has potentially significant financial implications, which we are busy unravelling."

Cachalia speculated that the development is the outcome of a "political deal" to keep president Ramaphosa in power for another term.

Energising the support 

Ramaphosa was strongly supported by Gwede Mantashe - minister of mining and energy and national chairperson of the ANC - when he was was re-elected as leader of the ANC last month.

In the lead-up to Eskom CEO André de Ruyter's resignation, Mantashe accused the utility's management of "actively agitating for the overthrow of the state" by not dealing with load shedding. Mantashe also made earlier statements that De Ruyter was acting "like a policeman" at the corruption-riddled entity.

"It would therefore be a grave mistake to move the utility – despite some ostensible rationale from an administrative and operational perspective – into the grubby hands of an ambitious bully who will use the coal lobby (with all its warts) and his allies in the cabal …to champion the saving of jobs under the guise of the fixing of Eskom's Energy Availability Factor [a measure of plant performance]," Cachalia said.

Alongside the need for a stable base load power, the DA said it is necessary to explore and accelerate generation from other multiple sources "on a source-agnostic, lowest-cost basis, while we explore the most suitable, least invasive, energy-dense solution".