The Eskom debacle is a prime example of what happens when there is no competition and the government of the day has socialist leanings wanting to centralize everything to consolidate its power.

I read today that the cabinet is trying to figure out how to least impact the poor while continuing with Eskom’s tariff hike. If the government will just relinquish their control of the power generating industry and make the necessary changes to the regulatory environment to encourage private sector involvement, they could then invite the private sector, local and international, the enter the power generating industry in the country.

There are companies out there chomping at the bit to build power stations and supply electricity, and the World Bank loves giving these types of infrastructure loans. This would be a win-win for all concerned, most importantly the consumer. These private power generating companies would increase competition thus bringing down the price to the consumer and most importantly they will be private so there will be no bail out by the tax payer and / or the consumer, if they do not perform they would simply just go out of business.

This country will implode if just one of those 45% tariff hikes is introduced, we already have the most expensive electricity in the world, which includes the USA which has a much stable power grid than ours. So once again we are getting less for more. If the price of electricity goes up everything else goes up exponentially, people will stop purchasing products, businesses would close, unemployment would rise causing crime to increase. Not to mention people would cut back on electricity thereby cutting into Eskom’s income and in turn causing another tariff hike…and so the cycle continues.