home Featured, News, Politics ANC lekgotla endorses Enoch Godongwana‘s privatization plan for SOEs

ANC lekgotla endorses Enoch Godongwana‘s privatization plan for SOEs

Photo credit: AIDC

By BO Staff Writer

The recent ANC lekgotla adopted a pro market approach to the country’s energy crisis. This includes relaxing regulations relating to self-generation, authorizing municipalities to buy their own energy and extending the independent power producer (IPP) program.

The lekgotla decision on independent procurement by municipalities follows the City of Cape Town (DA led) application to the courts for a declaratory order authorizing them to procure electricity from IPPs. The case is anticipated to be dealt with in May this year. The ministry of energy has reportedly opposed this application.

Enoch Godongwana, the head of the ANC economic transformation subcommittee, confirmed that the ANC adopted a position of relaxing the regulations. To this end he quoted the following from the ANC lekgotla resolution, at a media briefing on Wednesday:

“Regulations should be eased to allow increased levels of self-generation in the economy and for municipalities in good financial standing to procure their own power.”

Godongwana moreover reflected on how state-owned enterprises (SOEs) like Eskom are run by the government.

“Most of Eskom’s fleet is old so it requires sufficient time for maintenance … If you are to do proper maintenance you need to shut down, which has implications for load-shedding,” he remarked.

Eskom has cited repairs and maintenance issues, a huge debt to the tune of R450bn, and design challenges at the Kusile and Medupi power stations, as the reasons for its current crisis. In the meanwhile Eskom has been identified by the rating agencies as the biggest risk to the country’s economy.

The plan is to give Eskom enough space to do maintenance, but to prevent it from being shut down, additional capacity will have to be brought in. IPPs will accordingly be used as an emergency measure and in this regard the Department of Energy has already issued a call for expression of interests (“request for information“) which will close at the end of January.

Black First Land First (BLF) President, Andile Mngxitama, referring to the ANC lekgotla statement of its resolutions suggested that it reeks of a privatization plan. Taking to social media he said:

“Check paragraph 8. The ANC lekgotla has endorsed privatization. Pravin and Stellenbosch win….”