Patrick Craven
12 March 2014
Federation says earlier govt efforts to privatise the parastatal are at the root of the current crisis
COSATU statement on Eskom crisis
Eskom's recent ‘wet coal' crisis has revived bad memories of the load-shedding crisis in 2008, when COSATU made a comment that is just as relevant today:
"The Congress of South African Trade Unions shares people's anger at the enormous disruption to their lives and the economic prospects for the country caused by Eskom's ‘load shedding'. It has become a serious national embarrassment and could have a major impact on economic growth and job creation."
Both then and now however, COSATU has strenuously resisted the predictable arguments from right-wing commentators that the cause of Eskom's problems is that it is state-owned and that the solution is privatisation.
A typical example is Business Day editor, Peter Bruce, who, in his Thick End of the Wedge column (10 March 2014) argues that the Eskom crisis shows that:
"... It is time to put privatisation, or a version of it, back on the table. We have an opportunity now to privatise in a uniquely South African way to solve South African problems, bringing unions, the poor and investors into an inclusive pot that could change our future."
Nothing could be further from the truth. As COSATU explained in 2008, the crisis which exploded then, and continues until today, was the result of a misguided attempt by government in the late 1990s to prepare Eskom for privatisation.
"COSATU accepts that Eskom are not to blame for the crisis we now face," we said. "They warned the government years ago that they needed money to invest in new power stations, and applied to the government for this. But the government refused to provide the money, which President Mbeki has now admitted and apologised for. This was because at the time that Eskom made the application, the government were set on privatising it and other public utilities, and selling them off to the highest bidder. They thus made Eskom to be inefficient."
Strangely, Peter Bruce cannot disagree with this. "The current mess is not of Eskom's making," he writes. "It was screaming long ago to be allowed to build more capacity, but the government wouldn't let it until it was too late." But he then makes the curious assertion that "What we are paying for now is pure ideology."
But that ‘ideology' was his very own capitalist ideology, the idea that privatisation was the magic wand which would solve the problems faced by Eskom and other state-owned enterprises (SOEs). The whole episode illustrated the folly of trying to run what ought to be a public service as if it was a private commercial company.
As we said in 2008, "COSATU consistently opposed privatisation precisely because we insisted that it must be a national service, efficiently providing secure and affordable power to the people and to industry. This could never be achieved by a utility that was motivated instead to maximise its profits. We welcome the government's rejection of the planned privatisation. We demand that the government and industry now speeds up the process of providing Eskom with the money they need for capital investment, so that we can bring an end to the crisis as quickly as possible."
The problem in 2014, is that despite that welcome change in policy in 2008, it was too little too late, and the new coal-fired power stations at Medupi and Kusile are still unfinished, and unlikely to come on stream until next year. Hence Eskom remains teetering on the brink of a new crisis, which can be sparked by a minor blunder like the delivery of wet coal to one power station.
The solution in the short term is to do everything possible to complete the construction of Medupi and Kusile, and intensify the campaign for more efficient use of electricity by businesses, government and individual consumers.
In the longer term however, instead of building more coal-fired power stations there is an urgent need to upscale investment in the renewable sources of energy. While it is cheaper now to produce electricity from coal, it is going to be more costly in the medium to long term. The inverse is true of the renewable sources of energy, which will be relatively expensive initially but cheaper in the long term.
Increasing investment in renewable sources of energy and developing capacity in green technologies and industries will also create jobs and play an important part in the drive to combat the negative effects of climate change.
This will obviously require money, but must not be an excuse to revive the idea of privatisation. Eskom can still solicit investment from the private sector, but must never become solely dependent on it, and should prioritise cooperatives and community owned renewable energy entities.
That is why COSATU has called for a special, once-off tax on corporations to fund the necessary expansion of Eskom's capacity. This would preferable to more of the annual above-inflation tariff increases we have suffered over the past few years which have hit low-income workers and the poor, and we reject any attempts by Eskom to apply for further tariff increases before the end of the current multi-year-price determination period.
COSATU also insists that Eskom stops its attempts to shift the burden for its problems on to its workers. Because it is deemed to be an essential public service, many Eskom workers cannot legally go on strike.
Eskom therefore should do everything possible to negotiate in good faith to ensure that workers are given decent wages, yet it outrageously failed to do so recently when it abruptly terminated negotiations, unilaterally went to the CCMA and persuaded it to make an arbitration award, under which Eskom imposed a 5.6% increase on basic salaries. This amounted to a total cost-to-company of 6.3% including adjustments on allowances. In real terms, with inflation currently at 5.4% this is virtually no increase at all.
Yet these same employers have awarded themselves bonuses of R31 million over two years (R17m in 2013 and R14m in 2012).This is yet another example of a public utility being run in the same way as private companies, in which personal enrichment rather than public service is the top priority.
Statement issued by Patrick Craven, COSATU national spokesperson, March 12 2014
No comments:
Post a Comment