It has long been clear to me that it is about time that State-owned power utility Eskom was sliced up and sold.

You have to understand that I am a great supporter of Eskom; I worked for the utility and I greatly admire some of its systems, in particular, the distribution maintenance systems. There are, however, compelling arguments for Eskom to be privatised in sections. There is overwhelming evidence of corruption at high levels. As an example, at the Duvha power station, a boiler blew up last year. Eskom says it changed the grade of coal being supplied to the boiler. Other sources say that Eskom did not knowingly change the grade of coal – the coal supplier, in cahoots with the Eskom supply chain, allegedly supplied low-grade coal and was paid for a higher grade; the high ash content of the low-grade coal resulted in a fall-off in steam. When the boiler control system tried to refire, the boiler, with an injection of oil, blew up.

Since the boiler supplied about 2% of the demand of the national grid, one would expect that the boiler would be fixed, and pronto. Typically, this has not happened. After Eskom engaged three vendors and gave them three days (yes, 72 long hours) to come up with a price for a new boiler, the bidding process collapsed. Now Eskom has obtained prices from GE, Murray & Roberts and a Chinese firm called Dongfang. Everybody has heard of Murray & Roberts. Some know GE as General Electric of the US. The number of people who know Dongfang, outside the Eskom inner circle, would fit into my sauna, with space to spare. We can certainly say that, if GE or Murray & Roberts supplied the new boiler, a good deal of the cash would trickle down to us poverty-stricken voters. But Dongfang? Boilers in Eskom are supplied by Steinmüller, by Siemens, by Alstom. The only reason why Dongfang is considered is because the deal is corrupt.

Not all of Eskom is corrupt. At the distribution level, it is very noncorrupt. The service provided is excellent. At district level, it is not corrupt; overstaffed, with overpaid and inexperienced people, perhaps – but not corrupt. In fact, it seems that, largely, the transmission part and the distribution part of Eskom are not corrupt. It is generation and management that are at fault. The answer, and there is only one answer, is surgery. Eskom must be sliced up and sold to private industry. The broad divisions of Eskom are generation, transmission (the large power lines and substations) and distribution (the other power lines and substations). On average, Eskom spends R600 000 a year on each employee. A South African farm manager is paid about R200 000 a year. Eskom is running out of money and the management is directionless.

This is how it should be: offer all the coal generation plants up for sale, either as a group or in lots. Sell all the distribution on a provincial basis to private concerns. Let Eskom as it is currently own and operate transmission.

The first thing that will happen will be the retrenchment by private companies of the overstaffed Eskom entities. Massive savings. Secondly, the generation units (power stations) would have to bid on a weekly basis to supply power to the grid. This will reduce the cost of electricity. Most importantly, the money that is lost to corruption will no longer be lost. It is ridiculous to have a situation where corruption accounts for the loss of hundreds of millions of rands and nothing is done about it.

Is Eskom too big to be sold? This is hardly so; its fixed-asset value is about R500-billion. There are many deals which have taken place which are worth more than this. Some might argue that putting up Eskom for sale would allow foreign investors to get a foothold in the Southern African economy. Does anybody really care? So-called foreign investors already have a foothold in the economy. Any new investors could hardly be more corrupt than the existing ones. Something’s gotta give. Sell Eskom.