OUTA calls for Eskom to be unbundled

The Organisation Undoing Tax Abuse (OUTA) has lodged a complaint against Eskom with the Competition Commission. The aim of the complaint is to have Eskom fined and unbundled, “due to monopolistic control and conduct of electricity supply and pricing in South Africa.”

OUTA clarified: “The complaint is based on Eskom’s abuse of its dominant position in the electricity market and its exclusionary acts. [OUTA] requests the Competition Commission to investigate the possibility of breaking Eskom into two distinct corporations that separately control electricity generation and transmission, both owned by the State.”

According to OUTA, it believes that a separation of control over the arms of electricity generation and transmission will break Eskom’s stranglehold over the grid. This will in turn ensure open competition for energy generation at the lowest cost of production for South Africans.

The complaint follows Eskom’s implication in the Public Protector’s State of Capture Report, and well as the release of the Dentons Report. In addition, OUTA highlighted that for months, “Eskom has steadfastly refused to follow Ministerial Determinations on the procurement of Independent Power, where Eskom’s management has unlawfully refused to sign Power Purchase Agreements duly procured from the private sector by the Department of Energy. This conduct is presently preventing the investment of R58 billion into energy generation projects to proceed and as a consequence, the curbing of more than 13,000 construction jobs from commencing.”

OUTA added: “Eskom is also openly agitating for the building of a large nuclear fleet at an exorbitant cost that will ensure its monopoly into the 22nd century, which is a serious concern for civil society as Eskom’s poor leadership controls and conduct has been the subject of ongoing debate. The numerous calls for a clean-up and no political meddling within Eskom have now been justified following the revelations within the recent Dentons and Public Prosecutor’s reports.

“[Eskom] has repeatedly been accused of a lack of transparency and an inability to curb rampant maladministration and corruption, which has meant the consumer has been lumbered with increased costs of electricity to cover the expensive and excessive outcomes of Eskom’s questionable conduct.”

*When contacted, Eskom advised that the Department of Energy and the Department of Public Enterprises should be approached. At the time of publication neither Department had responded to requests for comment.

To see OUTA’s submission to the Competition Commission, click here.