A private company, seeking only to increase its profits, will nearly always deliver better goods and services than a state company. But not always.
A private company, seeking only to increase its profits, will nearly always deliver better goods and services than a state company. But not always. A well-run state industry will always produce cheaper and more reliable electricity than a private one. (Eskom was a well-run state industry; it is now a badly run state industry.) This is because electricity is capital-intensive and the state can always raise capital more cheaply than the private sector, and the state is content with a low return and a long payback period. Nowhere on Earth has privatisation of electricity brought cheaper, more reliable electricity. It has usually done the opposite, sometimes disastrously, as we can see with electricity failures in Australia, the US, the UK and throughout Western Europe. But that’s the plan being posited by Ramaphosa. Someone help us. This article was first published on the Daily Friend.- Sandra Laurence
Sense and silliness: Ramaphosa’s energy plan
By Andrew Kenny
In his energy plan announced last Monday, President Cyril Ramaphosa said, “The measures we are announcing this evening, together with the steps we have already taken, will hasten the end of load-shedding. They will put our country on a clear path towards reliable, affordable and sustainable energy supply.”
They will do nothing of the kind.
Ramaphosa, who seems to have no ideas of his own, bounces about between various factions of the ANC who have definite and stupid ideas; he bounces between socialists who want the state to control everything and the free-market radicals who want everything to be privatised; and he bounces off green ideologues who have wrecked electricity supply around the world with enforced “renewable” (solar and wind) generation. His energy plan is a mishmash of all this nonsense with a bit of good sense thrown in here and there.