"We Will Not Privatize Power Company" Said South African President - Focus News


Sunday, 12 January 2020

"We Will Not Privatize Power Company" Said South African President

South Africa President Cyril Ramaphosa has said on Saturday that the country power company will be privatised and promise to revamp it to a full operation. 

He made this statement at the 108th anniversary of the ruling African Nation Congress (ANC) party. 

“Eskom will be restored to becoming a company that can provide energy. We are not going to privatise Eskom. We are going to strengthen Eskom so that it can deliver energy as it should.” said Ramaphosa, 

The power company which powered 95% electricity utility of the country has been suffering from mismanagement for decades and corruption under former president of the country Jacob Zuma including its poorly designed coal-fired power stations, 

Vanguard reports that, Eskom has accrued 450 billion rand ($31 billion, 28 billion euros) debt, which is very unhealthy and posed major threat to the economic development of the country. 

South Africa being the most industrialised economy of the continent have been economically amputated  due to this unprecedented debt accrued from her power sector have been warned by economists to reposition her power sector for the betterment of the country economy.

The President urged Eskom management to rapidly restore its ailing power stations and promised government assistance for the task. He said new power plants faced a “number of design challenges” that needed to be fixed.

Meanwhile, Rolling blackouts were implemented several times last year to prevent the grid collapsing and resumed last weekend despite a government promise not to ration power during the first two weeks of January.

While the Eskom chairman Jabu Mabuza stepped down Friday in protest, South Africa’s government has pledged 128 billion rand (around $8.9 billion) to Eskom over a three-year period that began in February 2019.

The president has also announced plans to divide Eskom into three subsidiaries: generation, transmission and distribution, by March 2020.

While addressing the citizens in the city of Kimberly,  he added that “It is too big to fail and we will not allow Eskom to fail,” 

He added that, the power challenge has affected the economy performance of the country and the lives of its citizens vowed to do anything in his capacity to redeem the standard of the company through alternative sources of energy from gas shipment and other private companies

"This has a negative impact on our economy and on the lives of our people. We will step up our investment drive… reduce the cost of doing business, and see to the creation of jobs. For all these efforts to succeed, we must ensure the stability of electricity supply.”

It is noted that the President has been pressurized since his assumption to the office for second term for all his promise to revamp the country's economy

Meanwhile, The International Monetary Fund warned last year that continuous bailouts to state-owned entities were not sustainable and that growth could not be generated by government spending alone.

World Bank has cut its economic growth forecast for South Africa from 1.0 per cent to 0.9 per cent in 2020 due to the challenges erupt from its  power supply.

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