South Africas national ministers will now bear shareholder responsibility for certain State-owned enterprises (SOEs) that previously fell under the Department of Public Enterprises (DPE). The decision, formalised through a proclamation signed by the President on August 26, 2024, places Eskom under the direct control of the Minister of Electricity and Energy.
This shift is expected to bring more focused leadership and accountability to the state utility, struggling with operational inefficiencies, ageing infrastructure, and a massive debt burden.
The signed proclamations which, in terms of Section 97 of the Constitution of the Republic of South Africa of 1996, transfer administration, powers, and functions entrusted by the specified legislation, says Presidency spokesperson Vincent Magwenya .
By concentrating Eskoms oversight within the Ministry of Electricity and Energy, the government aims to streamline decision-making processes and ensure clearer accountability for the utility's performance.
The reorganisation aligns Eskom more closely with national energy policy. The utilitys integration into the Ministry is expected to facilitate a more cohesive approach to energy planning, particularly as South Africa transitions to renewable energy sources.
Eskoms long-standing issues, including maintenance backlogs and an unsustainable debt load, remain at the forefront of the governments agenda. The focused oversight under the new ministry could lead to more targeted efforts to tackle these challenges, including possible restructuring of Eskoms debt and increased investment in critical infrastructure upgrades, the stakeholder said.
With more direct control over Eskom, the Ministry of Electricity and Energy is better positioned to implement effective strategies.
The reorganisation also boosts public and investor confidence in the governments management of Eskom. Clearer lines of responsibility and the potential for more decisive action may reassure stakeholders that the government is committed to resolving the utilitys issues, the stakeholder said.
The changes come as the government prepares to finalise the National State Enterprise Bill, establishing the governance framework for SOEs like Eskom. The bill is expected to outline the exercise of shareholder responsibility across various SOEs, leading to the creation of a national enterprise holding company.
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