The state-owned energy company Eskom announced a profit of R30.3 billion for the second consecutive year. This significant turnaround came after a period when the organization was on the brink of collapse.
Successes in resolving corporate governance issues, which long clouded the company's operations, were made possible by the efforts of Minister of Electricity and Energy Dr. Kgosiyenso Ramokopa, Eskom Board Chairman Mthetho Nyati, Group CEO Dan Marokane, and CFO Kaliba Kassim.
This is a sharp contrast to the catastrophic period under former CEO Andre de Ruyter, when Eskom faced some of the worst operational difficulties, and South Africa experienced an unprecedented level of power outages.
Although Eskom's shortcomings cannot be ignored, the improvement in its financial health raises an important question: if profitability was one of the arguments for unbundling the utility, what is the compelling argument for its breakup now?
The last three years show that Eskom has overcome the crisis. Moreover, Ramokopa has demonstrated the political will to restore the utility, which could potentially reduce dependence on state subsidies and ensure a more stable position.
There is also a great danger in handing over too much of South Africa's power supply to private hands. Private companies are inherently driven to prioritize commercial sustainability and profit generation. However, Eskom carries a broader public responsibility to provide electricity to the entire country, including areas where providing energy may not be commercially viable.
Electricity is already an unaffordable luxury for many households. A system increasingly oriented towards profit could further restrict access for poor and rural communities, which could have devastating consequences for development and livelihoods. Therefore, the call from the ANC Youth League for caution regarding the splitting of Eskom deserves serious consideration.
President Cyril Ramaphosa has made it clear that he supports the restructuring of Eskom and greater involvement of independent power producers. Sometimes fixing things is wiser than destroying them. If the ultimate goal is to dismantle Eskom, turn it into an empty shell, and hand the electricity market over to independent power producers (IPPs) on a silver platter, then the split will be less about saving Eskom and more about creating a market where IPPs can thrive at the expense of the utility itself.