Unbundling Eskom Is Like Shifting Chairs on Titanic

The government’s plan to unbundle Eskom into three separate companies focusing on generation, transmission and supply under a holding company, and sell old power stations, does nothing to solve the utility’s main problem, Business Day reported in a commentary. To understand that problem one needs to appreciate the existing electricity market design and government funding of state-owned companies. In SA the electricity market design means power is generated, transmitted and distributed by a vertically integrated monopoly. Some municipalities are also monopoly electricity distributors, buying electricity from Eskom and selling it to households, with the attendant risk of causing a debtor management problem for Eskom. Read more