Abstract
M.Com. (Business Management)
In February 1990 the State President of the Republic of South Africa unbanned the political organisations that were previously banned. This set the scene for full and free elections. It also brought new role players to the fore. Parastatal institutions, including Eskom, now faced the problem of having to adapt to the new environment. or face the possibility of serious intervention from a new Government.
During 1990 Nedcor and Old Mutual formed a team of experts, including one specialist from Eskom, to seek alternative paths that South Africa may embark on in an attempt to foster an environment that would enhance the possibility of a successful transition to a democratic South Africa. The team produced a scenario, which became known as the "change of gears" scenario. One of the cornerstones of this scenario is a kick-start of the economy, inter alia through supplying with electricity those citizens who do not yet have access to electricity.
With a view to this the Nedcor/Old Mutual scenario suggests an electrification rate of one
million houses per annum. This figure was criticised because of the negative effect it would have on the balance ofpayments.
The Nedcor/Old Mutual scenario was presented to many parties, including the Cabinet and the ANC Executive. Although criticism was expressed against this scenario, it served a meaningful purpose in that it was probably one of the impetuses for the ANC's national meeting on electrification and the creation of other scenarios, such as that of Van der Berg. as well as other studies such as this dissertation.
This dissertation, comprises an environmental scan of the needs and wants of the parties affected by electricity and electrification. These parties were identified as: Eskom; the local authorities; the people who currently do not have access to electricity; the central government; the unbanned political parties; and the consumers ofelectricity.
It has been ascertained that South Africa, in the form of Eskom, has an excess power
generating capacity of approximately 25 percent; that 65 percent of the population does not have access to electricity; and that the price of electricity is low as compared to that ofthe rest ofthe world. It has also been established that in South Africa the percentage ofhouseholds
(ii) electrified is approximately twice as high as that of any other country on the sub-continent. From this it was concluded that the issue of electrification is a political one, nevertheless an opportunity to improve the economy. The views of the interest groups were studied, with particular emphasis on the views expressed at the ANC's first national meeting on electrification. The views of the parties were reduced to a list of sixteen requirements/expectations. These were divided into two groups, these on which there are a high degree of consensus and those on which agreement would have to be obtained. The latter included the pricing issue for prepaid meter customers versus
the other small power users; the effect of poor load distribution on the price paid by black local authorities; the gross underutilisation ofmanpower in the industry, due to the fragmented structures; the redistribution of wealth; strong Government intervention; and the question of the level ofprofits in the industry.
From this follows the recommendation that the electricity supply industry be onsolidated
under the Eskom structure and that the issue around electrification be depoliticised.It is also recommended that a stable rate of electrification of approximately 250 000 houses per annum be maintained.