The privatisation of Eskom within the RDP and GEAR

Busakwe, Weziwe Sylvia (2003-12)

Thesis (MBA)--Stellenbosch University, 2003.


ENGLISH ABSTRACT: When the African National Congress (ANC) took control of govemment in 1994, it was forced to find an economic strategy that would strike a balance between an improved level of service and maximum economic growth. The privatisation process, which had already been initiated by the previous apartheid government, was continued in order to depoliticise utilities that were contentious in terms of their allocation of scarce resources or competing resources. Privatisation is an economic transformation strategy used worldwide to provide solutions to countries' economic problems. However, within the South African context, it focuses mainly on the restructuring of state-owned assets, with the following objectives: • To reduce the state debt and to stimulate economic growth and development through the sale of state-owned assets • To re-orient and enhance the public sector's ability to meet challenges identified by the Reconstruction and Development Programme (RDP) • To restructure the state-owned enterprises to be more efficient in their operations, while at the same time maximising their contribution to the country's economic growth. The objective of this study is to explore issues that surround privatisation - which governments should understand when planning and implementing privatisation - by studying the process of privatisation adopted in the case of the state-owned electricity monopoly, ESKOM. In a quest for detailed information, this study includes: • An analysis of the economic strategies adopted by the government • The political background to the establishment of these strategies • An analysis of ESKOM and its strategy for privatisation The following problem areas in the privatisation and restructuring of state assets have been identified in the South African economy and need more attention when embarking on privatisation of state-owned enterprises: • Effects of privatisation on the delivery of services to the poor • Conflicts in ideology between the trade unions, particularly the Congress of South African Trade Unions (COSATU) • Lessons experienced with other parastatals that have been privatised. This study has identified concerns and challenges that surround the privatisation of ESKOM, and also privatisation as a whole in South Africa. It shows that the government falls short of achieving its pre-determined objectives in the economic transformation of the country as laid down in the Reconstruction and Development Programme (RDP) and the Growth, Employment and Redistribution (GEAR) macroeconomic strategy. This alone indicates a need to revisit these strategies and align them with the economic realities facing the South African population. Differences in ideology and views between labour and the government indicate a need for an open consultative process and a clear policy that guides the restructuring of state assets so that the poor are not affected by the adverse effects of privatisation.

AFRIKAANSE OPSOMMING: Toe die African National Congress (ANC) in 1994 beheer oorgeneem het van die regering, was dié organisasie gedwing om 'n ekonomiese strategie te vind wat 'n balans sou handhaaf tussen 'n verbeterde diensvlak en maksimum ekonomiese groei. Die proses van privatisering, wat deur die vorige apartheid-regering geïnisieer is, was voortgesit met die doel om fasiliteite wat omstrede was in terme van die toedeling van skaars bronne of kompeterende bronne, te depolitiseer. Privatisering is 'n ekonomiese transformasie-strategie wat wêreldwyd gebruik word om oplossings vir lande se ekonomiese probleme te verskaf. Binne die Suid-Afrikaanse konteks fokus dit egter op die rekonstruksie van staatsbates, met die volgende doelstellings: • Om staatskuld te verminder en om ekonomiese groei en ontwikkeling te stimuleer deur die verkope van bates wat in besit van die staat is. • Om die openbare sektor se vermoë opnuut in te stel en te bevorder om sodoende die uitdagings wat deur die Heropbou- en Ontwikkelingsprogram (HOP) geïdentifiseer is, aan te pak. • Om staatsbates te herstruktureer sodat hulle meer doeltreffend bedryf kan word en om terselfdertyd hul bydrae tot die land se ekonomiese groei te maksimeer. Die doel van hierdie studie is om die kwessies rondom privatisering (wat regerings behoort te begryp wanneer hulle privatisering beplan en implementeer) te ondersoek deur die privatiseringsproses van ESKOM, die elektrisiteitsmonopolie in staatsbesit, te bestudeer. In die soeke na uitvoerige inligting, sluit hierdie studie die volgende in: • 'n Analise van ESKOM en sy strategie ten opsigte van privatisering • 'n Analise van die ekonomiese strategieë van die regering • Die politiese agtergrond tot die opstel van hierdie strategieë. Die volgende probleem areas rondom privatisering en herstrukturering van staatsbates in die Suid-Afrikaanse ekonomie is geïdentifiseer en het meer aandag nodig wanneer staatsbates privatiseer word: • Gevolge van privatisering op lewering van dienste aan die armes • Teenstrydige ideologieë van die vakbond federasies, veral die Congress of South African Trade Unions (COSATU) • Lesse geleer van ander semi-staatsinstellings wat geprivatiseer is. Hierdie studie het kwellinge en uitdagings rondom die privatisering van ESKOM, asook rondom privatisering in Suid-Afrika in die geheel, geïdentifiseer. Die studie wys dat die regering nie sy doelstellings bereik het nie ten opsigte van die ekonomiese transformasie van die land soos uiteengesit in die Heropbou- en Ontwikkelingsprogram (HOP) en die Growth, Employment and Redistribution (GEAR)- makro-ekonomiese strategie. Dit alleen dui op die noodsaaklikheid om hierdie strategieë te heroorweeg en om dit in lyn te bring met die ekonomiese realiteite wat die Suid-Afrikaanse bevolking in die gesig staar. Verskille in ideologie en sienings tussen arbeid en die regering wys op die nodigheid vir 'n oop konsulterende proses en 'n duidelike beleid wat rekonstruksie van staatsbates op so 'n manier rig dat die negatiewe gevolge van privatisering van staatsbates nie daarop impakteer nie.

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