Eskom and the Dual Character of the South African State

Abstract

South African policymakers’ failure to embrace a rapid transition to renewable energy (RE) generation results not simply from insufficient appreciation of its immediate and longer term benefits, but from their protracted deterrence of this option. The sources and mechanisms of deterrence, however, long predate the advent of RE competition, as may be seen from the evolution of South Africa’s energy parastatal, Eskom. Prior to the current era of universal franchise, the combination of lengthy periods of dominant party rule with the rise of dominant mining interests made parastatals a useful means of combining industrialisation with political patronage. At the same time, however, Eskom’s governance structures were explicitly designed to insulate it from popular pressure and demands for transparency in all but the most extraordinary of circumstances—a tendency that continued into the democratic era. The use of “preferential procurement” legislation to govern licencing and government purchasing creates incentives for companies to recruit the politically well-connected onto their boards, increasing the interpenetration of public and private interests. These factors combined to make the neo-patrimonial governance style of the Zuma presidency more likely, and conflicts of interest virtually inevitable. In parallel with these developments, however, an absence of transparency and accountability—and the growing challenges of sourcing affordable coal for electricity generation—have conspired to make inadequate infrastructure planning and resultant power outages also increasingly likely. The “perfect storm” of “peak coal,” patronage, poor planning and lack of accountability have combined to plunge Eskom into a protracted crisis from which it is unlikely to emerge intact.