No one would buy Eskom, even if it sold for R1 - Ieading economist

2019-02-22 12:57 - Tehillah Niselow, Fin24
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The debate around the privatisation of Eskom is a "myth", according to economist Dr Iraj Abedian, who says he hasn’t met a single investor who would buy the power utility’s assets – even if they were sold "for a rand".

"There’s nothing in Eskom that any private, sensible investor would want to buy, when talking about privatisation.

"What are you smoking?" Abedian asked a panel discussion on the budget speech in Cape Town on Friday.

Trade unions are opposed to the separation of Eskom into three separate entities as part of the restructuring process, saying it will cause job losses and lead to the private sector controlling the provision of essential services.

The debt-laden parastatal will receive R69bn from the fiscus for the next three years, subject to strict conditions announced by Finance Minister Tito Mboweni on Wednesday.

The generation side of Eskom, according to Abedian, has 65% of its parts that are out of their economic life.

Irrelevant debate

"Union leaders, where have you been? Which cave have you been hiding in? Wake up... The debate is fake [and] irrelevant to the national interest," said Abedian, who is also the CEO of Pan-African Investments and Research Services.

Minister of Public Enterprises Pravin Gordhan pointed to design flaws in the build programme for Medupi and Kusile power plants, which have caused cost overruns and delays.

Plant breakdowns and low reserves of fuel and diesel led to load shedding in November, December and last week.

Abedian said Eskom has three elements, and the national grid or transmission is a national monopoly and shouldn’t be privatised.

He added that both the generation and distribution units of Eskom are businesses and can become profitable for the private sector to compete in.

'Job creation will come'

"Job creation will come if we bring alternative technology, not to continue polluting [with coal]," Abedian said.

He said unions were "part and parcel" of bringing former president Jacob Zuma to power and they cannot be trusted to act in the public interest over Eskom.

Abedian commented he was disappointed Mboweni didn’t address the "R400bn" he says was stolen with the help of law firms, consulting companies and audit giants during "State Capture" and plans should have been announced to recoup the money.

Unions, government, business and civil society will discuss the restructuring of Eskom and potential job losses in the coming weeks at the National Economic Development and Labour Council.