Budget speech delivered by treasury will exacerbate energy crisis in South Africa

The National Union of Mine Workers (NUM) believes that the budget speech delivered by the minister of finance will exacerbate the energy crisis in South Africa. The government has taken the neoliberal path, which will see less public sector participation in the energy generation, transmission, and distribution business. The state has decided to open the energy business to the private sector.

The continuation of Eskom's legal separation into three businesses will not resolve the energy crisis; instead, it is a means to open the energy business to the free market. The decision to unbundle Eskom is not based on empirical reasons, but an ideological direction forced on the state by the imperialists who want to control our energy sector.

The minister announced that the last R70 billion debt takeover for Eskom will be replaced with R40 billion in 2025/26 and R10 billion in 2028/29. This will result in a saving for the government of about R20 billion. This reduction will negatively affect Eskom’s balance sheet. As the NUM we are violently opposed to this reduction. The main mandate of Eskom is to provide affordable electricity to businesses and communities. The state must realise that there is a bigger picture in supporting Eskom because the failure of Eskom will be disastrous to the economy. The only way to drive economic growth is to have a reliable electricity supply.

The Public-Private partnership which will be introduced in the contraction of the transmission lines will result in the privatised transmission business. This will indirectly push the price of electricity high. Poor people and small businesses will be unable to afford electricity. The minister announced the introduction of the Independent Transmission Programme will be launched later this year. This is another way of privatising the transmission business, hence the NUM is opposed to this neoliberal path. We still believe in the public pathway when it comes to the generation, transmission, and distribution of electricity.

Privatising the State-Owned Enterprises (SOEs) will undermine the dreams of many of the poor people. The private sector is only interested in profit maximisation and not the provision of services. Only the state can provide reliable, affordable electricity to all South Africans. The private sector will only provide electricity to the rich.

For more detailed information, please contact: 

Khangela Baloyi, NUM Energy Sector Coordinator, 072 450 6251

The National Union of Mineworkers
7 Rissik Street.
Cnr Frederick Johannesburg
Tel: 011 377 2111 Cell: 083 809 3257
Twitter: @Num_Media

Facebook: https://www.facebook.com/pages/NUM/10086002340216