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Ramaphosa routed the RET faction – but rolling blackouts could floor him

Ramaphosa routed the RET faction – but rolling blackouts could floor him
President Cyril Ramaphosa and Gwede Mantashe at the opening of the ANC's 55th national conference at Nasrec in Johannesburg, South Africa on 16 December 2022. (Photo: Leila Dougan)

As President Cyril Ramaphosa chaired another day of back-to-back meetings on Tuesday to bring the power crisis under control, government sources have said that sabotage for political ends is at play.

Since December, and after Eskom CEO André de Ruyter resigned, power cuts have ramped up, with generating units at power stations dropping like flies. This has created a political crisis for President Cyril Ramaphosa, who routed the Radical Economic Transformation (RET) faction of his party at the party’s Nasrec convention but could be taken out by the electricity crisis. It is kneecapping the economy and pushing millions of people and businesses into more severe hardship.   

“We are entering a dangerous place. People are playing Russian roulette with infrastructure,” said a senior government official who could not speak on the record. The official said there had been jubilation at power stations when De Ruyter resigned in December, “when he tried to expose shenanigans at power stations. Politics can trump the national interest.” 

Multiple sources in government and the Presidency have told Daily Maverick since December that there is sabotage of the national grid to push back against the transition from a coal-based energy system to a multisourced power grid with a focus on renewables.  

South Africa has won kudos for the $8.5-billion Just Energy Transition Investment Plan (JET-IP) signed at COP27 in Egypt in 2022, one of two big energy transition plans in the developing world funded by rich countries. The transition has accelerated, but so has opposition from political and business interests invested in a coal economy where mining, trucking, maintenance and procurement fortunes have been made in one generation, all reliant on Eskom’s monopoly. 

“If you can create an emergency situation, it allows Eskom power stations to follow emergency procurement,” explained a business leader.

The main street in the impoverished neighbourhood of Masiphumelele in Cape Town, with vehicle lights the only illumination during rolling blackouts on 18 March 2019. (Photo: EPA-EFE / Nic Bothma)

De Ruyter had to go because he tried to dismantle his own coal monopoly, the first Eskom CEO to do so. 

“PG should be next, they believe,” said the government source. “PG” is the acronym for Public Enterprises Minister Pravin Gordhan. A different source in the Presidency read the moment as a “plan to bring down the economy and show up the Ramaphosa administration”.  

Crisis talks fail

Ramaphosa failed to win the support of a multiparty front to tackle the problem after meetings on Monday, January 16. 

The EFF immediately issued a media release slamming plans to take co-responsibility for blackouts and co-create a solution — Ramaphosa’s go-to position in a crisis.   

The Democratic Alliance is seeking a court interdict of an 18.6% power price increase and also of Eskom’s rolling blackouts schedule.  

The UDM’s Bantu Holomisa is fronting a bid with an influential grouping for a similar interdict (See Estelle Ellis’s report here); and Sakeliga, the Afrikaans business organisation told Rapport at the weekend that it would also go to court; in December it announced court action against load reduction. (Load reduction is Eskom’s reduced supply to municipalities which owe it R49.7-billion. See this report by Victoria O’Regan).   

Organised agriculture has warned that South Africa’s food production is in peril; emergency services are struggling with phone lines going down and water taps are running dry as pump stations and treatment plants can’t operate without electricity. Not all are exempt as essential services.  

The political crisis has built quickly for Ramaphosa, whose methods of persuasion and politics by committee are not working. This report showed that the interministerial Cabinet committee he set up as an emergency response has not been able to make a dent in power production and reform.   

An entire working month lost to load shedding in 2022 as Eskom’s head of generation resigns

A woman carrying her daughter on her back runs her takeaway restaurant by candlelight during rolling blackouts in Masiphumelele, Cape Town, on 26 May 2015. (Photo: EPA / Nic Bothma)

The Holomisa case has been brought by attorney Eric Mabuza, who is well-practised in cases against Ramaphosa, while the marquee advocate Tembeka Ngcukaitobi will argue the rolling blackouts interdict, which is also being brought by small black-owned businesses. (See this report by Nonkululeko Njilo on how the business of an ice cream vendor touted by Ramaphosa as an example of positive Covid-19 relief is melting away.)  

Cabinet at odds and in denial  

Ramaphosa’s Cabinet is at odds over the crisis, with dollops of denial. Mineral Resources and Energy Minister Gwede Mantashe has said he can fix the problem in six months once Eskom is tucked into his portfolio. Gordhan said in 2022 that all public shares in state-owned companies, including Eskom’s, would be housed in a State-Owned Enterprise Council to be set up in the Presidency — like Singapore’s Temasek model.  

 In a terse response to Mabuza’s letter, Gordhan said the government was taking advice:  

“We want to assure the public that everything possible is being done to end or minimise load shedding.  Those who are part of corruption, intimidation and abuse of procurement practices or obstruct government’s efforts to clean up each power station of such corruption, will face the might of the law.” 

Visit Daily Maverick’s home page for more news, analysis and investigations

Finance Minister Enoch Godongwana, who is leading South Africa’s team to the World Economic Forum meeting at Davos, told Reuters on Monday that Eskom had a management problem, not a diesel problem. He has refused to stump up the cash Eskom needs to keep the open-cycle gas turbines for emergency power running at full tilt. He said the fix on Eskom would take 12 to 18 months, but Ramaphosa may not have that long. He can’t gainsay Mantashe on Eskom because he has the bullish minister to thank for his second term as ANC president. 

An NGO worker cooks pasta on a gas hob by candlelight during a blackout in Beirut, Lebanon, on 17 August 2021. (Photo: Francesca Volpi / Bloomberg via Getty Images)

A business leader explained the power play to Daily Maverick last December. “The only route to [Ramaphosa] maintaining power is a quid pro quo between him and Mantashe where [the President] gives him [Mantashe] licence to follow [his version of] a balanced [energy] transition.” 

Mantashe stands firm — like an oil rig in opposition to a clean energy-led transition. To survive, Ramaphosa may need to sacrifice Gordhan and dial back on the transition plans. But this comes with its own headaches as a new economy is being built on new energy. 

“There’s a whole lot of anxiety on the part of donors,” said the Presidency source. They are asking: ‘Are we back-tracking on the just transition plans?’ ”  

Eskom’s death spiral

One of the reasons the dilemma is so difficult to parse for Ramaphosa is that without the 18.65% increase granted by the regulator to Eskom, the utility can’t survive. The first chart, below,  shows that without the reallocation of the regulatory clearing account from the fiscus to Eskom, without diesel bailouts (which fall under “IPPs” in the chart), it can’t continue as a going concern.  

Source: Eskom’s multiyear price determination to Nersa.

Godongwana is holding back on taking a portion of Eskom’s R390-billion debt on to the national balance sheet. The second chart, below,  shows that Eskom is budgeting for lower sales, which means the exodus from the grid is gathering pace.

Source: Eskom’s multiyear price determination to Nersa.

rolling blackouts retailers

Working in the dark during rolling blackouts. (Photo: Emile Hendricks / Foto24)

“You can have a bully-boy huffing and puffing but the change is happening under our feet,” said the Presidency official.  

Mantashe says he can fix Eskom in six months because there is “idle” capacity of 20,000MW. News24’s Kyle Cowan has shown, in this fact-check, why this is not so; there are units out on maintenance and regular outages, often attributed to sabotage. 

Source: Eskom’s multiyear price determination to Nersa.

The third chart, above, shows that Eskom’s maintenance plan is scheduled until 2027, and without maintaining the cranky old fleet of coal-fired power stations, the grid can collapse. Any quick-fix solution will reduce the maintenance schedule and quicken the death spiral. DM


Comments - Please in order to comment.

  • Joe Soap says:

    South Africa watches politicians deal with a real problem. One that promises and lies cannot fix. This is the world most of us live in. We produce tangible output. If there is no output then people know we have not done our job. After watching this we need to ask ourselves. What benefits do politicians provide. What good comes from having this layer of lying, stealing and incompetent people who cannot produce tangible output. I believe none and as society we need to come up with a governance model that excludes them and the drag on society that they have.

    • Jeremy Stephenson says:

      Absolutely agree. The political class in this country does not add one discernable jot of value. They consistently prioritise their own survival over the interests of the nation. And when a crisis hits, the only thing that occupies them is the avoidance of responsibility. We need a system that is more accountable, considerably leaner, and focused single-mindedly on the greater good of the country.

    • Colin Attwell says:

      100% agree. A politician is as much use as a bicycle is to a hippopotamus. We need governance by the people, not by their elected officials, where there is little or no accountability.

    • Bryan Shepstone says:

      Maybe time to give some form of Rob Hersov’s DAO idea a try? 🤔

  • Mac R says:

    Good article. Many here will agree that the root cause of Eskom’s troubles is political.

    The engineering, financial and operational problems are all very solvable by competent people. The trouble is that the competent people are leaving, being assassinated, and their hands tied by politics.

    And the political problem isn’t easy to solve. Think through the possible outcomes of the election in 2024, and you’ll see that the political landscape will probably get more complex, meaning a slower response to the problems.

    Only if the majority of SA shifts their vote to opposition parties can something happen, but history makes me doubt that.

  • Jeroen Dubbelman says:

    I question whether the RET faction is “routed”. Mantashe is a player! If he says he can fix Eskom in six months then he has access to the lever controlling sabotage! Which means he has the ear of Zuma. Or is it the other way around. Hehehe!

    • Thinker and Doer says:

      Very well put. I don’t think that the RET faction has been routed, and it is likely that if Eskom is placed under Minister Mantashe, a pliant CEO is appointed, and the business as usual before Mr De Ruyter really tried to crack down on the corruption resumes, which it is likely planned to, the sabotage at power stations will likely magically disappear, but the corruption will resume at previous levels, untroubled. It seems that this quite likely is what will happen, given how dependent the President is on Minister Mantashe for his position

  • Peter Doble says:

    The country is on a collision course with destiny like a ship of fools guided by a greedy, self-interested crew. It is no longer a case of will the ship sink – just when.

  • Miles Japhet says:

    Nothing short of a massive audit of all staff competence and radical effective prosecutions of thieves, saboteurs and fraudsters will give us half a chance to save this broken organisation. It’s all about the people.

    • sandy govender says:

      I agree. The President should attempt to partner with Private big business in a 51 percent share offer. This will give autonomy to big business(51%) stake to route out corruption in the interests of profit. The political conundrum that the President finds himself in will be circumvented. Included in this partnership, should be a future similar split in the shareholding for renewables. This will ensure that Private Business remains interested and invested in the transition process, petty politics will be sidelined and prompt action against saboteurs will deter others from such nefarious activities.

  • Carsten Rasch says:

    Everybody is blaming the RETs for the rolling blackouts (I’ve decided not to use the eufemistic term ‘load-sheddung any more) but what about Mantashe? Every day we are being pushed closer and closer to a Carpowership deal, fracking and other fossil fuel options, Mantashe’s ‘solution’ to our energy crisis. Mantashe is opposed to the dismantling of the energy monopoly and favours coal, and industry overrun by criminal syndicates. Who stands to gain most from the destruction of Eskom? Mantashe…

    • hohnecl says:

      Greedy is in full control.

    • Thinker and Doer says:

      Yes, indeed, there seems to be a definite agenda at play by Minister Mantashe, and he seems to be succeeding quite well currently, with the exception of the troublesome environmentalists causing some issues. It is unfortunate that the recent court cases that have been launched do not seem to be naming Minister Mantashe as a party, when he is clearly a key party in exacerbating the crisis. It would be good if the investigative media could really intensively investigate what is going on in the Department of Mineral Resources and Emergy.

  • Mpumi Bikitsha says:

    Sabotage – we keep on hearing this and it just seems to be as slippery as mercury. Nobody seems to have a handle on it. Then come 2024, we will go and vote again, the looting continues. Jizaz!!!

  • Lawrence Sisitka says:

    I agree entirely with Joe (Soap – I love it!). There is no place for political parties in any real democracy. Having them at all is just a bizarre trope in which the world seems to have trapped itself. Why on earth do we hand over running of the country to those least capable of running anything? Maybe a greater irony is that of all the people we can vote for, politicians are probably the least voteworthy. It is high time that we moved forward to a real democracy where the citizens in partnership with civil society sanitation, business, academia, and industry make the key decisions. This could include agreeing on a ‘cabinet’ of recognised specialists, with deep experience in and passion for their areas of operation (education, social development, industrial development, arts and culture, security etc. – can you imagine?) who can be contracted/appointed to run the country for a specified period. OK, there is a lot more to be said about this approach but just to reiterate: there is absolutely no need for the parasitic political parties in a real democracy.

  • Lawrence Sisitka says:

    Sorry – in my previous post – not civil society sanitation of course, but organisations 🙂

  • Stuart Hulley-Miller says:

    One of the key drivers to our Eskom problem, together with the coal cabal, is the Karpower ships. This is seen as the financial saviour of the ANC and personal pension for the group driving the issues causing Eskom problems. We will soon see this ‘solution’ presenting itself from a new angle. Watch this space!!!

    • Alan Watkins says:

      I agree. Mantashe’s comments about fixing the Eskom problem within 6 to 18 months (I think) initially made no sense. Either
      – he is a fool who does not know what he does not know ( a very real possibility); or
      – corrupt Karpowership solution allows him to make this prediction while completely ignoring Eskom problems. In other words, let Eskom limp along with massive corruption and without making waves, but make no attempt to fix it, just bring in Karpowerships on the margin to get around most of our electricity problem .

  • Jorge Da Motta says:

    The sabotage on the infrastructure is a sign that more and more this country is being held to ransom by an evil mafia. I don’t think that the public at large is aware of the struggles that CR is facing in this regard. I believe that CR would enjoy far more support if this was widely understood. The energy transition plan is an ambitious and creative plan at growing our economy while reducing our dependence on coal…the big coal mafia is prepared to push SA under the bus in its bid to stop the transition plan. I think CR would win bigger support and cooperation if he was more open with the wider population as to the exact nature of this extortionist challenge. Another great piece from Férial Haffajee which needs to be made available (and understood) to the public at large…in other words, beyond the DM subscription base. How does one do this?

  • Heinrich Holt says:

    Something does not add up. If the coal-economy (as corrupt as it is) is so lucrative, why breaking it? I would have thought that a stable coal-economy (corrupt but not sabotaged) will be financially lucrative for the those corrupt beneficiaries? A stable coal-economy will actually prolong the ability to eat and feast from it. So why breaking (sabotaging) the already corrupt golden goose? I don’t understand politics, but this will force transition to renewables owned by business and individuals. Hardship lies ahead, but if the coal-economy corruption dies with it, it may just be a good thing.

  • D'Esprit Dan says:

    A few things here. Surely an audit of who is winning contracts to supply parts and services for things that constantly blow up will reveal who is responsible for the sabotage? Next, can Ramaphosa really keep Mantashe in position when he is clearly both out of his depth (not understanding a thing about Eskom or power generation as a whole) and in hock to the fossil fuel industry? The coal industry employs around 90,000 people, of whom only a portion would lose their jobs if we transitioned to other fuels – how many jobs in other sectors (including other mines!) are being sacrificed at the altar of the coal miner? It is estimated that over the course of load shedding, over 1 million jobs have been lost: this is also accelerating, with 350,000 lost in 2021 and an estimated 120,000 shed in Q3 22 – largely due to loadshedding! As ever, a small, politically connected mafia in the coal and transport sector is holding the country to ransom whilst the country withers and dies. Why are the other unions not up in arms about this? Why are other political parties not gunning for Mantashe based on this? All in all, a bit pathetic!

  • Malan van Rensburg says:

    “He can’t gainsay Mantashe on Eskom because he has the bullish minister to thank for his second term as ANC president. ”

    The most significant sentence in the article !

    Mantashe is in charge.

    CR is at GM’s mercy

  • Beyond Fedup says:

    Despite our dire situation with the economy, unemployment, Eskom, Prasa etc and the very real existential threat that it poses to our country, we still have the time and resources to expend on pointless and idiotic war games with Russia and China. Murderous regimes and gross human rights abusers!! We have time to host the highly odious Lavrov and his cronies. It simply boggles the mind that we are on the wrong side from every point of view – morally, trade- wise, human rights etc. How far this rotten and stinking ANC has treacherously deviated from its founding fathers.

  • Fernando Moreira says:

    Sell the ANC and buy the DA ! Dont complain voting for the ANC and whinging that nothing works and is destroyed !
    Save South Africa there is no time left !!

  • Cunningham Ngcukana says:

    We need tangible proof of sabotage because it has become a lame excuse for rank incompetence. An engineering company such as Eskom ought to have systems in place for risk management and compliance, quality control, investigations of incidents that lead to breakdowns in each power station, supply chain management, contract management that includes engineers, service level agreements with suppliers of coal and contractors. When the Eskom management have these press conferences in which they virtually list all the reasons for the summary dismissal in my view, you wonder where and what is happening to these systems and managerial tools of an engineering entity. The defence of the indefensible in the incompetence of de Ruyter surprises me. If you have coal with stones from a supplier where was quality control on delivery and even the foreman on the conveyor belt. Eskom is a national key point that ought to have an enhanced security with cameras for key areas and equipment. It begs a question when sabotage is said to be happening inside a national key point and to me it is nothing but drivel. To mislead the country through deployment o soldiers is nothing less than political dishonesty because the questions would be what engineering skills do they have to detect sabotage or quality of coal. Cyril has been blatantly lying o the country.

  • Paddy Ross says:

    I do accept the argument that Ramaphosa is beholden to Mantashe. He has nothing to lose by moving Mantashe from Energy. CR is a wealthy man and, assuming that he is in his right mind, can not possibly want to carry on as president of the ANC after the 2024 election. The ANC would be committing political suicide to drop CR before 2024.

  • Craig King says:

    Sub contract the management of ESKOM to one of the big American power companies and it will be running properly in less than a year. Do the same at PRASA and the rest of the harbours and railways and we can then think about an economic recovery just as soon as the insane labour laws are scrapped.

    Sounds a lot like colonialism doesn’t it. Unfortunately we will continue to choose poverty for ideological reasons. African Nationalism is a curse.

    • Dudley Annenberg says:

      Agreed. The only way to recover from this mess is to bring in an international power company and give them carte blanche to fix the problem. The job losses that may result in such a case will be miniscule to the job losses suffered in the country as a whole as businesses start to fail due to lack of power.
      Unfortunately this is probably a pipe dream at the moment

    • Ed Rybicki says:

      Really? You think so, in the face of what happened in Texas recently, and keeps on happening in California? Where “big American power companies” shave operating expenses to the bone, to the extent that if a crisis comes along (fires, and gasp! – winter), they fall down?

  • Patterson Alan John says:

    Eskom is the Titanic.
    Mantashe is the iceberg.

  • Lisbeth Scalabrini says:

    In order to keep his position, the President is willing to sacrifice the future, economic and otherwise, of the country. Is this really the kind of President that we want? OK, he is the best of a bad bunch, but letting Mantashe dictate the political line for the future, against common sense and against what the rest of the world is trying to do, is a bit too much and will not add anything good to the future of SA.

  • Johan Buys says:

    Can somebody at DM please ask the assembled geniuses this question before a meeting. Business is running many GW of relatively small (compared to the 150MW monsters at Eskom) diesel generators and at R21/liter. If we don’t it is the end of everything. What we spend is most certainly reducing our taxes so Treasury may as well fund Eskom. If that same scarce diesel at Eskom’s R7/liter were used instead, we would be two maybe three stages lighter for everybody and given the price difference and efficiency difference probably at a quarter of the money now going up in smoke.

  • Johan Buys says:

    by the way : it is not the bunny-huggers transitioning the country away from coal! The comrades that broke 40% of Eskom generation did that all by themselves, to themselves. If it was cheaper than solar and batteries I would transition my factory to running my own coal generation. It isn’t – neither is burning bunnies or forests. So my future is a forty foot sized container of batteries.

  • Roelf Pretorius says:

    It looks to me as if there is one of two political solutions; either let Mantashe have his way ON CONDITION THAT HE DOES THAT WITHOUT HAMPERING THE REIPPPP, and if he does not, then he is gone, ie to call his bluff; or Ramaphosa will have to change his governing style and starts to be more forceful, follow the successful Singapore example and consolidate Eskom in the presidency, strengthen the law enforcement agencies so they can clamp down forcefully on each and every one outside Eskom who dares fiddle with the infrastructure (including others like Transnet railways also), and change the laws dealing with infrstructure sabotage to make it the equivalent of treason. There is of course another possibility also (the one that happened with the Post Office): subsidise a micro sunplant for each and every house, factory and business and wind Eskom down. I actually think the last one is the only one left, because the corrupt people of the RET faction has become too embedded in Eskom; the resignation and poisoning of De Ruyter is a red light. To wind down Eskom will put them out of work and we’ll be rid of them. But we’ll have to keep the grid going, because in the process us as South Africans will become the next Eskom generation unit. Think about it; an average of 1.5kw (or 3 KW for 12 hours per day) for 30 million households is 45GW, or the total INSTALLED (not available) capacity of Eskom. And the money comes to us, not the thieves of Eskom.

  • Roelf Pretorius says:

    Well, it seems to me that the President has to choose between getting Mantashe to co-operate, and firing him anyway in 2024 (or Mantashe being fired by a President elected from another political party, even maybe Al-Jamaaha). Their choices are limited; and I don’t think Mantashe is too dumb to realise it. In fact something like 6 GW of renewables are already on the grid, which has had to have been signed by him. The question is what, if any, action is taken to upgrade the grid in the Northern, Western and Eastern Cape where next +- 30GW of renewables in the pipeline will come from? I don’t see any evidence out in the open that anything is done to do those upgrades. I would say that Daily Maverick/amaBhungane investigative journalists should start to zoom in on that aspect of our electricity crisis because that is the bottleneck that is throttling our economy now.

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