Eskom unbundling could be South Africa's Brexit, argues economist

The unbundling of Eskom has already caused tensions between labour and government, with various unions firmly against the proposal.

President Cyril Ramaphosa made the announcement that Eskom would be restructured in his state of the nation address last week Thursday.

The power utility will be broken up into three parts including generation, transmission and distribution in a bid to save costs.

Read: 'It's entirely Eskom's fault, and we take responsibility and apologise'

However, economist Duma Gqubule says plans to unbundle the utility could become a divisive and potentially detrimental move for South Africa.

He has questioned the sudden decision, claiming that the government had no clear plan for Eskom just a few months ago.

Gqubule warns that all stakeholders must be consulted on the proposed process of unbundling. He adds that a task team is needed to address the issues of economic policy.

Also read: Cosatu wants Ramaphosa to explain "unbundling" of Eskom

The way that government is handling it could turn it into the most divisive issue in South Africa over the last 25 years. It could become our Brexit if we don't handle it properly.

Duma Gqubule, Economist and founding director - Centre for Economic Development and Transformation

Eskom is bigger than the board. There are economic policy issues that go to the funding of this entity.

Duma Gqubule, Economist and founding director - Centre for Economic Development and Transformation

Meanwhile, energy analyst Chris Yelland applauds the move and says it's important to take action before Eskom causes severe and irreparable damage to the economy.

He explains that power utility will be split into three subsidiaries under Eskom Holdings and will remain a government entity.

Some unions are up in arms over the unbundling plans and claim that it's a move to get Eskom in the hands of the private sector.

Yelland, however, argues that it is an effort to drive assets into the utility and create self-standing entities with the state as a shareholder.

I think it's a good move and an important first step in the restructuring of Eskom, which is currently facing severe financial, operational and environmental problems.

Chris Yelland, Energy analyst, managing director and investigative editor - EE Publishers

This is certainly not privatisation, but preparing Eskom for a future structure.

Chris Yelland, Energy analyst, managing director and investigative editor - EE Publishers

Listen to the in-depth discussion:


Recommended

by NEWSROOM AI
Read More
'It's entirely Eskom's fault, and we take responsibility and apologise'

'It's entirely Eskom's fault, and we take responsibility and apologise'

Kieno Kammies speaks to senior general manager for demand management at Eskom Andrew Etzinger.

Numsa to embark on a strike over the president's announcement to unbundle Eskom

Numsa to embark on a strike over the president's announcement to unbundle Eskom

'As Numsa we are very clear that we oppose the decision by the president to unbundle Eskom.' says Numsa's Phakamile Hluni-Majola.

Cosatu wants Ramaphosa to explain "unbundling" of Eskom

Cosatu wants Ramaphosa to explain "unbundling" of Eskom

Cosatu says there should be no job losses and workers should not be made to pay for the looting of Eskom by its management.

It's a relief to have a president who understands the economy - Melanie Verwoerd

It's a relief to have a president who understands the economy - Melanie Verwoerd

Former ANC MP Melanie Verwoerd gives analysis of President Cyril Ramaphosa's State of the Nation Adress in Parliament on Thursday.

You watch this space! – President Ramaphosa makes firm commitments at Sona 2019

You watch this space! – President Ramaphosa makes firm commitments at Sona 2019

The 2019 State of the Nation Address is done and dusted. Here follows a summary of the speech.

  ‘Will’ this. ‘Will’ that. 'Will' - the most frequently used word in every Sona

‘Will’ this. ‘Will’ that. 'Will' - the most frequently used word in every Sona

We analysed every single State of the Nation Address since the dawn of democracy. Through booms and busts; it's always "will".

Here's how to check your load shedding schedule in Cape Town

Here's how to check your load shedding schedule in Cape Town

Eskom has warned that more power cuts can be expected as maintenance continues over the next twelve months.

Popular articles
What happens to our bodies if we cut out sugar

What happens to our bodies if we cut out sugar

Naked Scientist Chris Smith explains.

[WATCH] SANDF members hilariously mess up a supposedly easy practice run

[WATCH] SANDF members hilariously mess up a supposedly easy practice run

Khabazela shares tweets and Facebook posts that have gone viral.

‘We’d be crazy to copy! Sometimes we get it wrong. There's no culture problem'

‘We’d be crazy to copy! Sometimes we get it wrong. There's no culture problem'

The Money Show’s Bruce Whitfield interviews Ian Moir, CEO at Woolworths.

[VIDEO] Muizenberg pedestrian attacked in broad daylight

[VIDEO] Muizenberg pedestrian attacked in broad daylight

A woman was attacked on her way to work earlier this month.

Criminals targeting homes with aluminium windows, warns neighborhood watch

Criminals targeting homes with aluminium windows, warns neighborhood watch

The Panorama, Welgelegen and Plattekloof Neighbourhood Watch has identified a new house break-in trend.