South Africa’s Minerals and Energy Department could get control of Eskom

SOUTH Africa’s state-owned power utility, Eskom, could fall under the authority of the Department of Mineral Resources & Energy (DMRE) as part of a broader government effort to improve the management of parastatals, said Bloomberg News.

Eskom, arms manufacturer Denel SOC, South African Airways, and other entities are currently the responsibility of the Department of Public Enterprises, headed by Pravin Gordhan.

The re-organisation, which has not been finally decided, would better align companies such as Eskom with their functions, said Bloomberg citing people familiar with the matter. Denel may move to the defence ministry and SAA could shift to transport, they said, asking not to be identified as an announcement has not been made.

Gordhan’s fate is unclear. More clarity may be provided if Ramaphosa reshuffles his cabinet, the people told Bloomberg News.

Moving Eskom to the DMRE could slow the transition of coal to renewable power currently underway in the country. That’s because mines and energy minister, Gwede Mantashe, a former labour-union leader who worked in the coal industry, favours the continued development of coal-fired power plants.

Eskom supplies almost all of South Africa’s power.

Last year, Ramaphosa appointed a council to reposition and strengthen the governing framework of state-owned companies, address their liquidity challenges and implement turnaround strategies. The entities are struggling with debt loads after years of mismanagement and corruption, said Bloomberg News.