Just when you thought the log jam in our politics has finally been cleared, something happens to convince you otherwise.
Eskom is the largest and most critical state owned enterprise in the country, and it is also the most critical factor in our economic future.
No matter what the government of the day chooses to do to stimulate economic growth, it will all come to nought if Eskom fails, and unless the government stumps up a few billion before the end of April, that is what we are told will happen.
This comes hot on the heels of serial revelations about the pillaging of Eskom that has happened on the ANC’s (principally Jacob Zuma’s) watch, which is accompanied by a debt burden of over R400 billion, a tad shy of 25% of the national budget for the current fiscal year.
Eskom’s sovereign debt rating – CCC+, sub investment grade, better known as junk status – makes it virtually impossible for the power utility to seek funding to service its debt at rates that are anything less than usurious, even if it could find an institution stupid enough to lend it money, so it must turn to the local piggy bank, our Treasury, for a bailout.
As much as President Cyril Ramaphosa seems determined to fix the mess at Eskom, he seems to take two steps back for every one step forward.
His plan to split Eskom into three separate entities – generation, transmission and distribution under Eskom Holdings – was initially received by energy analysts with cautious optimism.
Once, however, it became clear that this move would do little to stem the haemorrhaging of cash by the utility, address its rapidly escalating debt burden, remedy the calamitous state of repair of the national generating equipment, or fix the inherently defective and unstable Kusile and Medupi power stations that were supposed to ensure that we do not again experience the crippling “load shedding” that has recently been foisted upon us, optimism rapidly morphed into scepticism.
But perhaps the most jaw-dropping announcement of all during Mr Ramaphosa’s much anticipated State of the Nation Address (SONA) last week, was the bald assertion that the changes at Eskom will not result in job cuts of any significance below the upper tier of management, despite an acknowledgement by CEO Jabu Mabuza that Eskom has “33% more people than was necessary”, and earlier reports that Eskom management was considering cutting 15 000 jobs as part of its restructuring plan.
It is easy to suggest that “Eskom is too big to fail” but let’s not forget Enron’s collapse in 2001 with its $74 billion (R1 trillion plus in today’s money) shareholder loss and the concomitant demise of Arthur Andersen LLP, one of the largest auditing firms in the world at the time.
Eskom can fail, and if it does, it will take down the whole country. And here’s the thing: Mr Ramaphosa knows this, which one thinks would motivate him to take a scalpel to Eskom, and cut its operating costs to the bone by shedding the 30 000 of its 48 000 odd jobs which energy analysts say can and must go in order for the utility to survive.
But that is just not going to happen.
As much as Mr Ramaphosa knows what must be done to save Eskom and the country, his hands are tied. Whereas his predecessor laid waste to everything and everybody as whim or caprice took him without consequence initially, Mr Ramaphosa cannot, nor will he, do the same, but for different reasons.
Jacob Zuma’s power base at the watershed ANC Polokwane conference in 2007 was handily shored up by the so-called “coalition of the wounded” that felt aggrieved because it was overlooked when it came to handing out the plum jobs in Thabo Mbeki’s government.
In similar vein, the cohort of equally disenchanted ANC aparatchiks who left the party to form Cope shortly before the 2009 election can also be dubbed a “coalition of the wounded” and for pretty much the same reasons.
Fast forward to 2013, and Julius Malema takes out of the ANC yet another “coalition of the wounded” and forms the Economic Freedom Fighters (EFF), which unlike Cope manages to keep its leadership you-know-what together, and contrary to dire predictions by the ANC that “it’s very cold outside of the Alliance”, survives and prospers and actually becomes a major thorn in the side of Mr Zuma and his acolytes.
Cope has largely amounted to nothing since reaching its zenith in the 2009 election with 7.42% of the vote, and the EFF has since usurped its place as the third biggest party in the National Assembly, with 6.3% of the vote in the 2014 national election.
Cope’s demise came about largely because its initial leadership duo – Mabazima Shilowa and Mosiuoa Lekota – squandered every cent of their hard-won political capital in a messy and very public battle in the courts over who should be supreme leader.
To its credit, the EFF managed to avoid that order of you-know-what measuring contest, and with the iron-handed and often canny leadership of Julius Malema, has managed to regularly upstage the ANC and the DA in the news visibility stakes, but often for the wrong reasons.
But the EFF has, along with the DA, lost a good deal of its political raison d’etre with the demise of Jacob Zuma, and both have yet to figure out what they ought to be doing to catch the hearts and minds of voters, which they both will, but too late for the May 8 election.
Which leaves us with Mr Ramaphosa and the tightrope he walks towards May 8 and beyond, with the original “coalition of the wounded” – Mr Zuma’s still active and significant support base – firmly entrenched in the power structures of the ANC, which prevents Mr Ramaphosa from doing what he knows he must do to save the country.
Weakened they may be, but they are many, and they are deeply entrenched, and all they need do is wait for that fatal misstep by Mr Ramaphosa.