Patrick McLaughlin focuses on the delayed parliamentary processing of the Electricity Regulation Amendment (ERA) Bill in South Africa, which aims to break up Eskom into its generation, transmission, and distribution divisions. McLaughlin points out the apparent sabotage of the bill by Minister of Energy Gwede Mantashe, raising concerns about the impact on energy development plans and the overall energy sector. The delay is attributed to political manoeuvring, conflicts between ministers, and concerns from trade unions about potential job losses associated with privatisation. He emphasises the urgency of passing the ERA Bill to address energy challenges and rebuild trust in public institutions.
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Eskom sabotage of the Electricity Regulation Bill
By Patrick McLaughlin
The ongoing parliamentary processing of legislation to make possible the slicing up of mega-entity Eskom into its generation, transmission and distribution divisions, has at last commenced under the aegis of Sahulele Lupidzo, chairperson of the parliamentary portfolio committee on mineral resources and energy. Between him and the Minister of Energy, Gwede Mantashe, the unexplained inability of this committee to meet and process this particular piece of legislation has become a scandal, damaging energy development plans in South Africa by simply doing nothing and what seems like part of some Machiavellian plan.
However, two days were finally put aside in mid-December as Parliament attempted to make a dent in the outstanding list of energy Bills from Department of Mineral Resources & Energy(DMRE) amongst them being the anchor Electricity Regulation Amendment (ERA) Bill. The hold up may have been partly due to Minister Mantashe’s spat between with Minister of Public Enterprises, Gordhan Pravin, when he was told to leave Eskom alone but the real reason (other than obviously supporting the unions in the coal industry) now emerges that he has been rushing about talking to people like Gazprombank on an LPG come-back for Mossgas. The revival of gas is no doubt as important to him as electricity is to SA industry.
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Parliament demands that any minister associated with any legislation must brief Parliament on every Bill tabled in their name in order to associate themselves initially with the tabling of a Bill and also bear responsibility for its implementation and outcome. Minister Mantashe rarely visits Parliament in any case, but often sends his deputy minister to meet such requirements, which is the minimum allowed by the Constitution. But in this case nobody at all has arrived in Parliament with DMRE constantly giving vague answers to parliamentary enquiries.
With these kind of manipulations, particularly when in cahoots with ANC chairperson Lupidzo giving constant excuses, coupled with the disorganisation associated within DMRE, a small library of outstanding energy legislation has built up scheduled for passage through Parliament. The delay with the ERA Bill has created uncertainty with investors, deeply troubling the markets and badly affecting SA business and industry in terms of strategic planning and budgetary control.
The Bill is part of journey planned by DMRE and a grouping of experts to break up Eskom and possibly re-route power generation controls away from Public Enterprises back to a new-styled DMRE. The purpose is to re-establish the ailing power giant as a viable energy complex within existing the electricity anchor legislation and to build separately a completely new multi-market structure for the electricity industry.
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In the public hearings attended by good advisors including Sasol; the Independent Power Producers Association, UCT’s Prof Anton Eberhard, Business Unity SA (BUSA), the Engineering Council of South Africa (ECSA) and the National Energy Regulator) , all expressed support for the Bill in principle. Some had made contributions to its design.
As a bloc, however, COSATU, the National Union of Mineworkers (NUM) and South African Federation of Trade Unions (SAFTU) dissented, trade unionist leader Mathew Parks flatly rejecting any idea of breaking up the power giant but in the process clearly displaying one of the major reasons for the unravelling of Eskom.
Parks said COSATU’s fundamental objection was that the unions object to any kind of legislation which enabled the privatisation of energy generation. This, he said, would lead to job losses, thus echoing Minister Mantashe and also his erstwhile comrades from NUM, of which he was once the leader.
Kevin Mileham (DA) said that the Bill was more about the electricity sector in a much broader context than just Eskom, in fact there was only one section that spoke to the unbundling of Eskom. The view of COSATU was ideologically based, he said, and not based at all on future energy needs. “The Bill deals with energy poverty in South Africa and this is of huge importance”, he said. “The delay is unforgiveable and has contributed to the country’s inability to supply sufficient energy to meet the needs of industry.”
James Mackay, ECSA CEO, said that the Bill was not about privatisation nor about solving climate change. It was also not a silver bullet to sort the deep economic and social deficits in this country. “It is about rebuilding trust in public institutions and having a fit for purpose national transmission company able to deliver correct, efficient and affordable service delivery”, he said.
Read more: Dan Marokane faces herculean challenges as new CEO of Eskom
The working parts of the Bill mainly provide for the setting up of a Transmission System Operator, this function being the first stage of a stand-alone operation accounting for the operation of the physical transmission grid network for a new electricity regime in South Africa, urgently and often called for by BUSA. Over the months, opposition MPs and the media have accused Minister Mantashe of deploying low tactics by purposefully delaying matters before the House , for which there is little redress in terms of parliamentary rules – unconstitutional though this filibustering appears to be.
Failure to pass the ERA Bill prior to the forthcoming 2024 elections will have a serious impact on business, industry, investors and all households, say industry specialists, who now also suspect as well Mantashe’s intentions in slowing things down. As this piece of legislation is a “section 76” proposal since the proposals affect such a wide spectrum of SA citizens across a broad section of the community, the Bill will require additional time for approval from all nine provinces, instead of the shorter route for process by the National Assembly only.
To get mandates from all nine provinces takes six weeks at the very shortest, meaning that debate now may only start in next March, there being little hope of concluding the Bill and its proposals until July which adds the additional issue of it having to be revived and retabled by the new government after elections. Now that a new CEO has been appointed for Eskom commencing also in March, one hopes that a little planning may have taken place in the meanwhile and he or she has some understanding of this manipulative man.
Hearings in NA complete
Two months ago, the DA angrily issued a statement which said, “It is clear that Mantashe and the ANC government, in deference to labour unions, have deliberately slowed down the processing of ERA Bill because the Minister knew that Parliament would not have enough time to properly apply their minds to the Bill in 2023.
Parliament re-convenes after the Christmas break in February 2024 and it appears that Minister Mantashe’s game plan to quietly work his fossil fuel agenda and frustrate the transition to renewable energy which Eskom say the grid is having trouble accommodating in any case.
In the meanwhile, Minister Mantashe has had time to announce the formation of a new state oil and gas entity under aegis of the State’s Central Energy Fund of which he, in the course of time, will no doubt become the champion, maybe perhaps even the chairman one day.
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