SO, ESKOM has backtracked on its demand that electricity tariffs rise by 45 per cent immediately. It now says 35 per cent will do.

But it won’t. It still has to be argued and justified and, frankly, there can’t be a case for it. Not a real case. That’s because Eskom’s acting CEO, Mpho Makwana, revealed yesterday, after announcing the slightly lesser tariff nightmare, that the company was considering partially privatising it’s yet-to-be-built R120bn Kusile power station.

That would be, um, in order to finance it. Kusile, planned for Mpumalanga, would pump out 4 800MW at its height, making it one of the biggest coal-fired power plants in the world.

But here’s the thing. If Kusile can partly be funded by private capital, why not the rest of  Eskom’s build programme?  Why should industry and consumers pay for anything?

Ok, I’ll be reasonable. In order to attract private equity into power generation, the prevailing tariffs would have to be attractive. But the principle of private ownership playing a role in Eskom (and other state-owned companies) should be a slam-dunk and not, as it is, unmentionable in polite ruling party circles.

I was talking to a very senior local businessman  who had recently been in India and had seen some of the power projects being built there — they told him they could move from conception to completion of a major ’six pack’ power station in three years. Eskom takes twice that.

The key is procurement — knowing where to get the parts you need in an environment when everyone is chasing the same equipment. We go to Japan. The Indians go to China.

Perhaps we ought to invite the Indians in as partners to Eskom — they are unthreatening, non-colonial, they’re not white and they know what they’re doing. Eskom is spending around R350bn modernising and expanding its capacity to power this economy. Let’s not be too fussy about who runs it or who owns it as long as they know their stuff.

Partial privatisation leaves the State in charge, as it would at SAA and Transnet if the same lights came on there as it appears to have done at Eskom.

Of course, the ANC Youth League and its current attention-grabbing ploy about nationalising the mines might have something to say but all the evidence is that if you ignore the Youth League it really does go away eventually.

Makwana put privatisation back on the table for the entire country yesterday, so, thanks Mpho. This time though there’s no need for the unions and the rest of the Left to get hysterical. This time it isn’t being pushed by the Right for ideological reasons. This time it’s practical, as all of our decisions should be.

What works best should be our guiding principle here.  Hell, if the State owning a mine that private capital only wanted a small slice of (as per the Julius Malema prescription) and it meant some economic value coming out of the ground and the people around the mine benefitting, how could you argue with that?

Cheers

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