IT IS CLEAR why André de Ruyter was deployed to Eskom. His utterances that Eskom is a dead horse, with him as the implied jockey flogging it, say it all.
His role is to switch off the power entity’s life support and administer the final rites so that the world can know that South Africa is racing at high speed to exit coal towards the mystique of a just energy transition.
There are four well-orchestrated strategies that undermine South Africa’s development effort.
The first is Eskom’s manufactured terminal disease; the second is the spirited support for the onset of Independent Power Producers; the third is US President Joe Biden’s praise for South Africa as exemplary in leading the so-called just transition, which his own country is considering with great care; and the fourth is the miserly pittance, call it “a noose” of R130 billion to South Africa, a Trojan horse of sorts, to which South Africa is lured to ground-zero its industrialisation, energy and rail efforts.
One has to look at how Eskom was founded and the history of the power utility to understand why these strategies are problematic.
General Jan Smuts, after taking power and serving as prime minister of South Africa in 1919, looked to engineer Hendrik van der Bijl, whose fame had spread in Europe and the US. Smuts understood that a scientific adviser would be an asset to his Cabinet. Van der Bijl was the driving force behind the establishment of Eskom.
It is said Van der Bijl “wanted to combine the advantage of a state-controlled undertaking with those of a public concern. The capital would be provided by the State and the company would be run on commercial lines. These ideas had already occurred to Van der Bijl while in the US.”
In this regard, Van der Bijl understood and influenced the concept of State-owned enterprises and he applied Keynesian theory 20 years before economist John Maynard Keynes could influence US President Franklin Roosevelt on his Marshall Plan in 1945. This was a mere three years before Van der Bijl died.
Rail in an experimental fashion came on line in 1867, but as the demand for moving commodities intensified it grew astronomically, and in 1910 Spoornet was created and this added to the mining industry. The two created a heightened demand for energy.
Consequently, Eskom was established in 1923 to power South Africa’s
industrialisation, through what Van der Bijl said should be affordable energy.
Van der Bijl took a R16 million loan from the State. Note that this was borrowed from the State and not open markets, which he had paid off by 2031.
World War II increased the demand for military equipment, food production and the freight of minerals by sea, especially coal. The mining industry had thus expanded significantly and, as a consequence, Mintek was founded in 1934 to undertake research in mining.
In 1945 South Africa established the Council for Scientific and Industrial Research (CSIR). A year before he died Van der Bijl had established Iscor and the Vanderbijlpark complex was completed. This successfully completed the visionary decision of Smuts for science-driven politics through Van der Bijl.
Post-World War II, the rail infrastructure continued to expand. In 1946 the Kazerne goods depot came into operation and by 1954 the rail mechanical workshops at Koedoespoort were commissioned. This remains a showcase of South Africa’s capability in the construction of railway infrastructure.
Today economic growth is lacklustre across the board in South Africa. In fact, in 2015, poverty reduction gains made during the preceding period had been lost.
Given the current events, the deepening crisis in the economy and the to-be-murdered horse – Eskom – the losses on gains made in fighting poverty are going to deepen.
Institutions that South Africa had such as Iscor, Eskom, Spoornet, Armscor and many others that were tasked with the developmental orientation of the State were able to do so through developing the requisite skills on a grand scale, albeit exclusively white.
In his 25-year tenure, Van der Bijl was responsible for the rapid advance of South Africa. He is said to have been a man of vision and forcefulness who planned magnificently.
To their credit, the Department of Science and Technology and the CSIR released a study in October of a process by which coal fumes can be captured.
One expected that this study would be a big deal at COP26 for extending the life of coal. It was not.
Smuts, Van der Bijl and Nelson Mandela must ask us, under the leadership of President Cyril Ramaphosa and Eskom chief executive André de Ruyter, two questions.
First, why have we decided to destroy Eskom? Is it for the shekels the world promised at COP26? Second, given that South Africa has found a process by which coal fumes can be captured, what will it take to scale this so that we continue to deliver affordable energy to households and industry through coal without killing the environment?
Dr Pali Lehohla is the former Statistician-General of South Africa and the former head of Statistics South Africa. Meet him @ www.pie.org.za and @Palilj01.
*The views expressed here are not necessarily those of IOL or of title sites.
BUSINESS REPORT ONLINE