Interesting FT Article on South Africa's Eskom energy crisis.
This comment is extraordinary
I don't think it's an exaggeration to call it a state-of-emergency. We have had five load sheddings in the past 48 hours. It really is a crisis. ATM's don't work. Shop's tills don't work. Traffic lights don't work. Apparently they are having to take as much as 10KW out of the system daily. Out of a total maximum of 45KW and at a time (in Summer) when they only use 35 KW. So basically a third of the entire power generation capacity of the entire f***ing country is unavailable. It really is a total fiasco.
Apparently as much as 1.5 trillion rand has leaked or been stolen out of the company over the last decade. They have gone through half a dozen CEO's and as many finance directors over the past 6/8 years and the entire senior management team numbering 17 Executives are either being investigated for corruption or have been fired. On top of which six out of a total of eight power generation stations are currently out of commission! Which means that the entire country's power has been running on only two power stations working flat out! They have debts of over 40 billion dollars (445 billion ZAR ) and their revenues are shrinking fast, they have just announced another massive loss, as more & more businesses & citizens are being forced to have to go off the grid. Meaning that to service even their existing debt they just have to keep borrowing more and more money sinking ever deeper into a massive black hole and viscous circle of debt.
Apparently the entire company is being run now by a team of junior Execs with next to no engineering experience. And if all of that wasn't bad enough they have also farcically run out of coal as fuel stock for even their existing totally decrepit and overworked remaining power stations. So they are are having to beg, borrow and steal low-grade coal full of rocks making further breakages and wear & tear in the last few remaining and heavily overworked power generation plants vastly more likely. They do have some back up gas-fueled facilities that run on diesel. Which they have been running at full-tilt and burning 50 thousand gallons of diesel oil a day! Roughly an entire oil tanker. At vast expense but even with this emergency back-up contingency in place they have also now totally run out of diesel! And are apparently waiting for a passing ship to come past the Cape to basically hijack it!
Honestly I don't see how this situation is in anyway sustainable. President Ramaphosa has said they they will break up Eskom into three subsidiaries of generation, distribution and transmission but I don't see how that will make any difference whatsoever. So deep-seated and structural is the array of issues they are confronted with. Plus, if the Govt. even look like privatising any of it. Or even attempting it given how politically sensitive that will be. Especially in an election year! They will have mass industrial action on their hands. As Eskom is the largest employer in the county with nearly 100,000 people on its payroll. (And it is roughly 60% overstaffed) Undoubtedly the unions (Cosatu etc) will fight tooth & nail to prevent that. Also every time the power goes off it basically kills the economy dead in its tracks, totally throttling industry & commerce. Which will kill an already anaemic flat-lining economy. I literally had to hand back a pint of milk & a croissant the other day as their POS machine wasn't working. It's a total f***ing disaster.
Most alarmingly still Eskom are now saying we could be in stage four until as late as April! But even then I just don't see how they can possibly bring more power generation capacity or even coal feedstock on-line in that time-frame. It takes five years minimum to build a new coal mine and up to a decade to build a new power station. Let alone the capital-ex costs involved. Which the county can ill afford. It's debt is already at junk status and if they really have to bail out Eskom that will absolutely torpedo the fiscus. So f*** alone knows what will happen. SA is all alone remember - way down here. In most other parts of the industrialised world in a situation like this they could just tap a neighboring county for spare capacity. But you can't do that here. SA's neighbors rely on SA for their own electricity.
The situation really is a total & utter f***ing sh*t show. An utter nightmare of a quandary. They must have known this would happen long ago. Total & utter rank corruption, graft, greed, malfeasance and head-in-the-sand political incompetence has brought the county to this point. When they literally cannot even keep the power on more than half the day indefinitely in a supposedly industrialized country. It may not be PC to say so but I am certain that this problem never would have arisen when the white man was in charge. Eskom used to be one of the most respected power utility companies in the world. But now the ANC stooges have feasted on it's carcass like hungry, bestial jackals until there was nothing left. And now the entire country is plunged into darkness. That's the stone cold truth. They should declare a state of emergency. Throw out the rotten lot of the management team.. Break it up. Slash the workforce. Privatise it. Jack up electricity costs and tap international capital markets to pay for its root & branch restructuring and ring-fence it from the rest of govt debt.
Then tender the problem out to the international power generation & engineering community. Foreign experts. That's the only way to solve this utter f***ing fiasco. It requires requires conviction, leadership and bold policymaking. Nothing else will solve the problem. Otherwise the listing Eskom behemoth will drag the entire economy down with it. Down into the inky depths.