Eskom's return to profitability demonstrates that the troubled utility company is capable of recovery, but the article's author believes that government restructuring plans could undermine this improvement if the financial and operational consequences are not disclosed.
Eskom survived state takeover, management vandalism, and political interference, which condemned South Africa to years of power outages. Now it may have to face reforms.
The company's latest reports are the clearest evidence of real recovery. Profit after tax more than doubled, reaching 30.3 billion rand from 14 billion rand after revision. Adjusted EBITDA rose to 108.6 billion rand. Cash generation strengthened, expensive diesel usage decreased, and capacity availability improved to 65.16%. By the end of August, Eskom reported over 460 consecutive days without power cuts.
This second consecutive period of profitability after eight years of losses proves that focused leadership, disciplined maintenance, and managerial space can still revive the ailing state institution.
Nevertheless, while Eskom is beginning to recover, the government appears intent on removing one of its pillars.
Recovery Does Not Justify Haste
These results are no miracle. Revenue increased by 12.74% due to tariff hikes, while sales fell by 6.2%. By year-end, municipal debt reached 111.6 billion rand, remaining substantial, and government assistance was indispensable.
However, these vulnerabilities strengthen the arguments for caution. They do not justify haste. A patient just out of intensive care does not get healthier if you remove an organ that generates income.
Independence Is Not Amputation
At the heart of the dispute is the future ownership of the transmission network. The government insists on creating a fully independent, state Transmission System Operator (TSO) separate from Eskom. It argues that the TSO should own assets, manage the electricity market, and ensure non-discriminatory access to the grid for both Eskom and private generators.
There is a valid argument for an independent operator. Power distribution, connections, and dispatching must be transparent and isolated from the commercial interests of any generator, including Eskom.
But operator independence and immediate transfer of asset ownership are not the same thing. The Electricity Regulation Amendment Act gives the government until the end of 2029 to establish a TSO, allowing Eskom's subsidiary to perform its functions during the transition period. The law provides for a transition but does not require Eskom's balance sheet to be amputated before the consequences are resolved.
In December 2025, Minister of Energy and Electricity Kgosiyenso Ramokgopa approved a strategy where the TSO would manage the market while network assets would remain with Eskom during the transition period. He stated this would maintain financial stability and energy security. This was not resistance to reform, but a sequence of actions.
Two months later, President Cyril Ramaphosa used a State of the Nation Address to overturn this strategy and policy direction, insisting that the TSO must own the network. In July, he supported the first phase of the restructuring working group report, which supported the same outcome. The full report was not published; only a Presidential summary was released, although its findings could change one of the largest bases of state assets in democratic South Africa.
The government calls this political certainty. However, from the Eskom boardroom, it looks like an accelerated implementation of a political reversal.
The Crime of Doing One's Duty
Mthetho Nyati's alleged transgression was expressing his opinion. The Eskom Chairman warned that premature transfer could trigger credit reserves, create accounting complexities, and destabilize bondholders. According to Nyati, the network transfer accounts for approximately 40% of Eskom's revenue, while the board's valuation estimated assets at around 110 billion rand. He argued that an operator should be created, but assets should only be transferred after debts and obligations to creditors are settled.
This is not the objection of a person defending a personal kingdom. These are questions that a competent board of directors should ask before approving the movement of 110 billion rand of state infrastructure. Nevertheless, the Presidency publicly reprimanded Nyati, accusing him of creating the impression that the restructuring was happening without and to the detriment of Eskom. It insisted that Eskom's concerns were known and discussed.
Known does not mean permitted. The government cannot claim risks are resolved while the Ministry of Finance interacts with creditors, determines valuations, and develops the deal. If answers remain open, the board of directors must continue to ask questions. The board of directors not only has the right to speak; it is legally obligated to act. Section 50 of the Public Finance Management Act requires the Eskom accounting body to protect its assets, act in the best interests of the organization, and prevent damage to the state's financial interests.
What was expected of Nyati? To nod politely while billions in assets and revenue are redistributed, and then explain why the board of directors failed to foresee the consequences?
South Africa has a peculiar approach to state enterprise management. Boards are condemned for compliance when corruption flares up, and then accused of obstruction when they challenge shareholder rights. The government wants independent directors, provided their independence does not inconvenience the government.
The Minister Who Stepped Back
There is also Ramokgopa. He advocated for separation, questioning its pace and scope, warning that Eskom could become a 'victim,' and arguing that it could not compete fairly with obligations not imposed on private players. Essentially, he agrees with many of Nyati's arguments. However, politically, he was absent at the time when this case needed a defender the most.
He is the minister whose phased model was overturned by the President and who publicly supported the chairman who was later reprimanded by the Presidency. But when Nyati was criticized for raising issues, Ramokgopa himself accepted those remarks, and the minister did not publicly oppose the censure or clearly defend the December model he approved. Now, the restructuring is driven by a task team led by the Ministry of Finance. Ramokgopa's department is represented, but the minister responsible for Eskom no longer seems to be the one guiding the decisive decision about its future.
He deserves praise for stabilization. The ministry of energy allocation helped reduce fragmented oversight and gave Nyati, Dan Marokane, Bhekis Nkumalo, and the Eskom teams room to work. Nyati also thanks him for prioritizing meritocracy in appointing the board of directors. But political credit comes with political responsibility. Ramokgopa cannot claim success in the transformation by becoming a spectator to a restructuring that might undo him. He should tell the country whether he still supports the rationale of his December decision.
A Playing Field Tilted Against Eskom
The broader issue is the government's use of the concept of 'level playing field.' Level playing field between whom? Private generators can choose reliable projects and creditworthy clients. They do not bear Eskom's universal obligation to electrify low-income households at the end of expensive rural lines, nor the burden of municipal debt, aging coal plants, and the role of last resort supplier. Eskom bears this burden. Private producers pay regulated network and wheeling charges. The question is not about free access. The question is whether these charges cover fixed network costs, balancing, reserve capacity, inherited liabilities, and cross-subsidies necessary to maintain connectivity for poor households.
If competitors take away Eskom's most creditworthy customers while Eskom retains municipal debt, development obligations, and politically constrained tariffs, competition will not discipline Eskom. It will exhaust it. The field is not level when one runner has to carry the stadium on their back. Removing network assets without proportional transfer of debt, fair value, and secured revenue could result in Eskom bearing the obligations while the TSO inherits the robust infrastructure. This is not necessarily legal privatization. But privatization can also occur through the distribution of risks and revenues. Risk remains social. Revenue becomes increasingly private.
Publish the arithmetic before moving assets. Before any major asset transfer occurs, the government must publish the task team's report and its financial modeling. It must disclose valuations, define transferred liabilities, obtain creditor consent, and explain how Eskom will be compensated for lost revenue. First and foremost, it must decide who funds the development mandate in the new market.
South Africa needs electricity sector reforms, competition, and private investment. But reform must expand national potential, not punish a state institution for demonstrating its capacity to recover. For years, the government neglected Eskom, interfered in its decisions, and allowed criminal networks to infiltrate it. Then it cited the subsequent collapse as proof that the institution itself was the problem. Eskom's recovery complicated this narrative. It showed that state ownership was not the sole cause of the failure. Political interference, corruption, deferred maintenance, and management failure were.
If the restructuring is truly designed so that Eskom is not put in a worse position, the government must prove it before transferring assets. If it cannot do so, then 'reform' is just a polite word used to strip ownership. Eskom has come out of the crisis. The state must remove the knife.
