THERE is presently justifiably a heated debate going on around Eskom's request for price increases. Whenever Eskom's efficiency is questioned, government tends to stand up, protecting Eskom and citing international comparisons.
All state monopolies are inherently inefficient. This is one of the reasons why governments worldwide strive to privatise as many state institutions as possible.
A case in point is SAA. Here we have the (fortunate) situation that the inefficiency shows at the end of each financial year.
During the business year, SAA can only charge competitive prices. Airlines all over the world – the local Comair is one of them – seem to be able to operate profitably based on these prices.
The inefficiency of SAA shows at the end of each financial year in the form of a massive loss.
There is no reason not to believe that Eskom and all other state enterprises are equally inefficient, given the fact that their employment policies and modi operandi are subjected to the same socio-political imperatives. The only difference to SAA is that Eskom's inefficiency does not show in the financial documents.
With Eskom being a monopoly, no local comparison is possible.
We know for a fact that many skilled staff members were given packages to make space for affirmative action appointments, only to walk the next month into the office as consultants at three times the salary. We also know that Eskom is owed billions of rand by municipalities who in turn are too scared to collect from defaulters for fear of service protests.
There are possibly many more examples of Eskom failing in controlling operating costs on the one hand and in addressing the problems on the income side on the other hand.
The government spends a good billion rand on consultants, so a few million more will not make much difference. There are certainly international consulting firms available (such as McKinsey) who can move into an organisation right down to departmental level and assess the efficiency of an organisation.
The result of such an investigation should then be made public, before all of us are asked to pay more for electricity.
The NER should have already long ago initiated such an in-depth investigation. The present discussion is too much focussed on the return of capital spent.
It is also flawed to compare South Africa's electricity prices with those of other first world countries without relating these prices to levels of the income of individuals in these countries.
When the then Eskom chief executive, Ian McRae, created the slogan "Electricity for all", he – in all likelihood – did not mean that it shouldn't be paid for. The politicians latched very quickly on to the idea, interpreting this as freebie, to be dished out for the garnering of support. This fatal mistake now haunts all of us.
H Fischer, St Helena Bay
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