The sign outside a small but popular coffee bar in central Cape Town reads: ‘Opening Hours — Ask Eskom’. Not that asking the state-operated electricity provider would be of much use.
Eskom has had 13 CEOs in the same number of years.
The last, Andre de Ruyter, survived a murder attempt (someone allegedly poisoned his coffee) before his sudden resignation in February.
The resignation followed an interview on a local television station where he alleged the ruling African National Congress (ANC) was complicit in the corruption that had crippled the country's largest parastatal.
The energy firm’s size is one reason it was targeted by the masterminds behind the rampant state capture under former President Jacob Zuma's watch. (Eskom currently survives on bailouts: since 2008, this has amounted to more than R220 billion – approximately $12.2 billion.)
Zuma's Indian-born business partners fled to the United Arab Emirates (UAE) after being implicated in the scandal.
Meanwhile, an extradition request to force the three Gupta brothers to return to South Africa was denied in the UAE’s high court on April 7, quashing the public’s chances of finding out who caused the on-going power crisis.
The issue of what is quaintly called ‘load-shedding’ – periods during which electricity in specific sectors of the country is shut down – has escalated to what Eskom calls Stage 6.
This means Annie, a single mother of two living in Claremont, a posh Cape Town neighbourhood, goes without electricity for eight to 12 hours daily.
‘The food in the freezer had to be thrown away; you can't cook dinner, there is no hot water, and the security system batteries have run down.
'The kids can't do homework projects (which require the internet) – it's a daily nightmare,’ she said.
Joe, a small shop owner, who uses an app to place orders and make deliveries, said his business folded because of the endless delays in internet service.
Last year, there were more than 200 days of loadshedding, and 250 are expected this year.
Actuaries and economists in the insurance world have been going through the small print on their policies.
They distinguish between loadshedding (controlled power outages) and grid failure (partial or loss of power resulting in blackouts).
According to the insurers, grid failure is not considered an ‘insured peril’ and is not covered because it is not a ‘sudden’ or ‘unforeseen’ event.
However, individuals and small businesses are struggling to get reimbursed for losses caused by loadshedding, too.
For example, Annie could not claim for the frozen food that went rotten in her freezer.
The Ombudsman for Short-term Insurance has said that the risk of a total grid collapse is so high that if everyone insured claimed, it would bankrupt the local insurance industry.
In January, the Sowetan newspaper used its front page to list the names of hundreds of small to medium enterprises (SMEs) that had been driven out of business due to the loadshedding practices.
This was in response to President Cyril Ramaphosa's announcement that he would cancel his trip to the World Economic Forum in the Swiss ski resort of Davos due to the electricity crisis shocking the nation.
The coffee shop man said his business was on its knees.
‘You can't simply go out and buy a generator and plonk it down on the pavement – there are city regulations, neighbourhood concerns about noise, etc, and the price of diesel fuel to run the generators continues to rise – besides, it's not a solution to running a small business,’ he said.
There is a way out of Eskom's ineptitude for the corporate giants. Amazon Web Services (AWS), for example, which has made a massive foray into South Africa, built a 10 megawatt (MW) solar plant in the Northern Cape province expected to generate more than 28,000 MWh of energy annually, supplying renewable energy to the AWS data centres.
Likewise, the mining conglomerate Anglo American partnered with Électricité de France (EDF) to form Envusa Energy to provide renewable energy generated on Anglo American sites. The initial project will have a capacity of 600MW and will produce 3-5 gigawatts (GW) by 2030.
The future is less bright, though, for South Africa’s SMEs, like the coffee shops, the laundromats, the small printing outfits, the butchers and bakers, and small-time fast food outlets.
According to a recent International Finance Corporation (IFC) report, 90 per cent of all formal businesses in the country are made up of these very micro, small and medium enterprises (MSMEs).
On top of that, they employ 50-60 per cent of the workforce and make up a third of the country's GDP.
This is a disaster in a country with unemployment running between 34 and 40 per cent.
President Ramaphosa ‘solution’ to this unfolding crisis was to create another ministry – the Ministry of Electricity.
With 30 cabinet ministers, South Africa has one of the largest in the world.
By comparison, Germany, for example, has 15 and the United Kingdom (UK) has 22.
The biggest challenge facing the minister of electricity, Kgosientsho Ramokgopa, is not what his job description says (‘to deal with the immediate crisis of load-shedding’) but to navigate the power struggle between the energy minister, Gwede Manatashe – whose initial response was to call Ramokgopa a ‘project manager’ – and Pravin Gordhan's Public Enterprise Department, under whose jurisdiction Eskom lies.
It’s unclear who will call the shots. Mantashe – a fierce opponent of renewable energy – is considered more powerful than even the president.
Ramokgopa also seems to be in flat denial (as are many ANC members) that the energy crisis results from corruption.
This corruption is well documented and ranges from corrupt tenders to fraud. According to a report in a local newspaper, Ramokgopa, on a visit to the Kusile coal-fired power station, said: ‘The challenges that we've had here, these are technical problems; they have nothing to do with so-called corruption.’
However, earlier in the year, the Special Investigation Unit (SIU) and the National Prosecuting Authority's (NPA's) Asset Forfeiture Unit implicated Tamukelo Business Enterprises, which tendered services for the Kusile project from June 2009 to November 2020. According to the prosecutors, Eskom lost more than R400 million ($22.2m) from the unlawful tender.
Part of the assets seized included a Lotus Europa sports car.
So, while the fast cars abound, and the government flip flops from a state of emergency over the energy crisis to declaring it ‘not a state of emergency’ a few weeks later, the country remains in crisis.
And asking Eskom for an answer is like looking for the candles when the lights go out.
