Article: Sell parastatals, says DA

[sox63]

The last time a Private company (The americans from SBC) ran a former "parastatal" (Telkom), South African consumers were ripped off royally. So imagine an company running the ONLY power generation source around?

Very scary thought to me...

 

[sox63]

Sell them? Hell no. You are basically buying a monopoly. They will charge us more and there is nothing we can do about it.

Rather break them up and then sell them so they are forced to compete with each other and the prices will go down.

+1

 

[StonerStuart]

The last time a Private company (The americans from SBC) ran a former "parastatal" (Telkom), South African consumers were ripped off royally. So imagine an company running the ONLY power generation source around?

Very scary thought to me...

Yip i totally agree!

 

[w1z4rd]

Government should not be in industry except to regulate it and create opportunities for it to grow in. Rather than run parastatals and stuff, on mission critical services (specifically for non-renewable natural resources), have good regulations or government partnerships (like Botswana does).

 

[w1z4rd]

The last time a Private company (The americans from SBC) ran a former "parastatal" (Telkom), South African consumers were ripped off royally. So imagine an company running the ONLY power generation source around?

Very scary thought to me...

I remember that... that was Tintana or something like that. They turned Telkom into the evil it is today.

 

[Nerfherder]

Who would want to buy these parastatals ?

SAA can't survive without constant hand-outs, Eskom - pass, Telkom - hell no.

You are kidding right ?

All that infrastructure already available... just needs some proper management.


i'd put money in that !

 

[Species8472]

The last time a Private company (The americans from SBC) ran a former "parastatal" (Telkom), South African consumers were ripped off royally. So imagine an company running the ONLY power generation source around?

Very scary thought to me...

I agree, handing any private company a monopoly is asking for abuse. There is simply no reason to compete or lower prices.

Sell them? Hell no. You are basically buying a monopoly. They will charge us more and there is nothing we can do about it.

Rather break them up and then sell them so they are forced to compete with each other and the prices will go down.

That is a much better solution. Imagine if eishkom had to compete on electricity price with 5 or 6 other companies, some provincial, some national? Have one infrastructure company that only connects all the power distribution networks together on a national scale, but does not have to worry about power generation or coal supplies, etc. Would be brilliant.

Same can be said of any parastatals, even some companies like telkom can benefit.

 

[yebocan]

Makes business sense, pushes up cash in bank and , parastatals in South Africa, basically have the whole monopoly mantra going for them, there is considerable value in these assets. However, negative side, you going to see profits leaving our shores, - need a mechanism to make it more profitable to keep the moola in the republic, rather then sending it somewhere else.

 

[yebocan]

The last time a Private company (The americans from SBC) ran a former "parastatal" (Telkom), South African consumers were ripped off royally. So imagine an company running the ONLY power generation source around?

Very scary thought to me...

oh yes that was jay naidoo's mess, all the consessions he made,...investment, at the time, outway what was in the national interest of the telecoms industry in the country...-made their profit, put us back 10 years and then buggered off!!

 

[Rkootknir]

I agree, handing any private company a monopoly is asking for abuse. There is simply no reason to compete or lower prices.



That is a much better solution. Imagine if eishkom had to compete on electricity price with 5 or 6 other companies, some provincial, some national? Have one infrastructure company that only connects all the power distribution networks together on a national scale, but does not have to worry about power generation or coal supplies, etc. Would be brilliant.

Same can be said of any parastatals, even some companies like telkom can benefit.

How do you break up Eskom though? This is the major difficulty I have with this idea (which would be good in an ideal world).

Do you sell the different power stations? What about the unprofitable ones? The government (i.e. the taxpayer) will have to keep funding them. Do you privatise the entire national grid? Who will be able to buy that (it won't be cheap)? Do you want a private company to have a monopoly on the grid? Do you privatise sections of the grid? - what happens to unprofitable sections now? What happens to the Western Cape? The large portion of their power they get from Mpumalanga via the national grid will be expensive if the implicit cross subsidies (between electricity costs in the Western Cape & Gauteng \ Mpumulanga) are lost due to privatisation of sections of the grid or individual power stations.

The SA government has over the last 100 years or so created an almost perfect "natural" monopoly. I think that trying to break it up will be extremely difficult.

 

[Fudzy]

How do you break up Eskom though? This is the major difficulty I have with this idea (which would be good in an ideal world).

Do you sell the different power stations? What about the unprofitable ones? The government (i.e. the taxpayer) will have to keep funding them. Do you privatise the entire national grid? Who will be able to buy that (it won't be cheap)? Do you want a private company to have a monopoly on the grid? Do you privatise sections of the grid? - what happens to unprofitable sections now? What happens to the Western Cape? The large portion of their power they get from Mpumalanga via the national grid will be expensive if the implicit cross subsidies (between electricity costs in the Western Cape & Gauteng \ Mpumulanga) are lost due to privatisation of sections of the grid or individual power stations.

The SA government has over the last 100 years or so created an almost perfect "natural" monopoly. I think that trying to break it up will be extremely difficult.

Split it up, generation and distribution.

 

[Rkootknir]

Split it up, generation and distribution.

That's asking for a repeat of Telkom & SBC in my opinion.

One private company owning all the generation assets and another owning all the transmission assets will still each have monopoly power on their respective area. They will exploit that to charge monopoly rents, just like SBC did.

 

[WilD_CaT]

Really only partial privatisation gets such an enthusiastic encouragement

How is it partial?

 

[Fudzy]

That's asking for a repeat of Telkom & SBC in my opinion.

One private company owning all the generation assets and another owning all the transmission assets will still each have monopoly power on their respective area. They will exploit that to charge monopoly rents, just like SBC did.

Huh? Inviting companies to come in and re-establishing articulation just doesn't make financial or logistical sense to me.