When the Apartheid regime was losing power, it created a plan to sabotage Eskom
[Thread]
[Thread]
First, in 1987 the Apartheid state scrapped ESCOM and replaced it with Eskom. But even though Eskom was still under state ownership, changing it from ESCOM to Eskom was much more than a name change.
The Apartheid government introduced the Eskom Act (No. 41 of 1987), which scrapped section 6(4) of the 1922 Act, which for decades had said South Africa's “electricity should be supplied in the public interest” and should be provided “neither at a profit nor at a loss”.
However, the 1987 Act introduced a clause that stipulated Eskom would “provide the system by which the electricity needs of the consumer may be satisfied in the most cost-effective manner, subject to constraints and the national interest”, just like a corporation.
Scrapping ESCOM was a neoliberal move. This policy was carried on by the ANC with their 1996 Growth, Employment and Redistribution plan which was so anti-poor, anti-Black even White people were shocked.
In 2001, Thabo Mbeki took things further and introduced the Eskom Conversion Act, which put Eskom under the Companies Act, making it a dividend and taxpaying entity and listing it on the Johannesburg Stock Exchange.
Not to put too fine a point on it, but what the Apartheid and ANC regimes did in 1987 and 2001 was a complete turnaround from ESCOM's decade-old structure, which had created conditions for cheap energy and government-regulated capital.
Before 1987, the Apartheid state had prevented the private ownership (commodification) of specific sectors like electrification and rail transport. When Apartheid collapsed, and the Blacks were about to take over, the Apartheiders switched and started expanding private ownership.
ESCOM was the centre of South Africa's state-run economy for over six decades. It transformed South Africa from a rural British outpost to a semi-industrial power and later a continental power. This development would not have happened without the state controlling ESCOM.
The Apartheid state understood ESCOM's importance so much that when borrowing money outside of SA in the 70s became difficult, they ensured local lenders filled the gap. When international markets opened up in the 80s, ESCOM became the biggest borrower. ESCOM had to be kept alive
When Apartheid scrapped ESCOM in '87, they created an Electricity Council made up of monopoly capitalists like the Chamber of Mines and SA Chamber of Business, which for the first time in ESCOM’s history, involved private capital in the decisions of the state.
The 1987 Act also transferred the newly constituted Eskom from the Minister of Minerals and Energy to the Minister of Public Enterprises, whose brief was privatising it before Black people took over the government (the same reason they shut down the nuclear weapons programme).
1987 was also the year Apartheiders fully embraced neoliberalism (a psychotic form of extreme capitalism); they announced the deregulation of the South African Reserve Bank and the privatisation of SOEs.
The 1987 Electricity Act fundamentally changed Eskom's terms of reference, the most important being that it could no longer operate without profit as it had for 64 years. This was never going to work, and they knew it.
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