Beyond the noise : Why governance, not rhetoric, must guide Eskom's unbundling

There is something distinctly South African about the way we conduct public policy debates.

We rarely begin with the law. We begin with personalities. We choose sides, declare heroes and villains, and then work backwards in search of legal justification. Somewhere along the way, the actual governance question quietly slips out of the conversation.

The latest disagreement over Eskom's transmission business is a textbook example.

Business Leadership South Africa (BLSA) has argued that the country's electricity reforms should culminate in the establishment of a fully independent Transmission System Operator that owns the national grid. The Eskom board, led by Mteto Nyati, has taken a more measured view, maintaining that the National Transmission Company South Africa (NTCSA) should remain within the Eskom Holdings structure while operating independently.

Predictably, the public debate has become polarised. One camp portrays the board as standing in the way of reform. The other accuses organised business of attempting to dictate public policy.

Neither characterisation does justice to what is actually at stake.

The uncomfortable truth is that governance is rarely dramatic. It is often procedural, technical and, to many observers, painfully slow. Yet those very qualities are what protect institutions from making expensive mistakes in moments of political enthusiasm.

South Africa has committed itself to reforming the electricity sector. That much is beyond dispute. The country needs a more competitive electricity market, significantly greater investment in transmission infrastructure and a regulatory framework capable of accommodating an expanding fleet of independent power producers.

Few serious commentators would argue otherwise.

The disagreement begins when people assume that every political commitment automatically creates a legal obligation.

It does not.

Much has been made of statements delivered during successive State of the Nation Addresses, ministerial briefings and reform roadmaps indicating that transmission assets would eventually reside within an independent operator. Those statements undoubtedly signal government's policy direction. They carry political weight.

They do not, however, carry the same legal authority as an Act of Parliament.

That distinction matters because South Africa is a constitutional democracy, not a system governed by executive proclamation.

The Electricity Regulation Amendment Act provides the legislative framework for restructuring the electricity market. It establishes the basis for an independent transmission operator responsible for ensuring open, transparent and non-discriminatory access to the grid.

What the legislation does not expressly prescribe is the compulsory transfer of ownership of Eskom's transmission assets out of Eskom Holdings as an immediate legal requirement.

That omission is not a drafting oversight. It reflects the reality that institutional restructuring of this scale cannot be reduced to a single political instruction.

It requires governance.

This is where much of the criticism directed at the Eskom board misses the point.

Directors of state-owned enterprises do not have the luxury of making decisions based on newspaper editorials or public sentiment. Their obligations are defined by the Companies Act, the Public Finance Management Act and the fiduciary responsibilities attached to public office.

Those duties require directors to ask difficult questions before they approve major structural changes.

What happens to the balance sheet?

How do lenders respond?

Will existing financing arrangements remain intact?

What are the implications for taxpayers if something goes wrong?

These are not excuses for delaying reform. They are precisely the questions competent boards are expected to ask.

Transmission infrastructure is not simply a collection of steel towers stretching across the countryside. It represents one of Eskom's most valuable regulated businesses and contributes significantly to the utility's financial stability. Any proposal to separate those assets inevitably raises questions about debt obligations, lender protections, asset valuations and long-term financial sustainability.

Ignoring those questions would not amount to courageous leadership.

It would amount to poor governance.

South Africa has already witnessed the consequences of major policy decisions taken without sufficient institutional discipline. Whether one looks at state capture, failing municipalities or repeated governance failures across parts of the public sector, the lesson is remarkably consistent: when due process is treated as an inconvenience, taxpayers usually inherit the bill.

That is why constitutional processes exist.

Large-scale restructuring of strategic state assets is not designed to happen through press statements, conference resolutions or lobbying campaigns. It requires Cabinet processes, regulatory approvals, public participation, socio-economic assessments and, where necessary, legislative amendments.

These safeguards are often criticised for slowing reform.

Perhaps they do.

But they also reduce the risk of replacing one national problem with another.

None of this diminishes the contribution organised business has made to South Africa's energy transition. BLSA has consistently argued for greater private-sector participation, accelerated investment and structural reforms that encourage competition. Those objectives deserve serious consideration and have helped shape an important national conversation.

Equally, the Eskom board cannot simply ignore its statutory responsibilities because reform enjoys widespread political support.

Its first obligation is not to satisfy the loudest voices in the room.

Its first obligation is to ensure that every decision complies with the law and protects the long-term interests of the institution entrusted to its care.

That may not generate enthusiastic headlines.

It is, however, exactly what South Africans should expect from those charged with overseeing one of the country's most strategic public assets.

Perhaps the most revealing aspect of this debate is how easily governance itself has become suspect. Caution is portrayed as resistance. Legal scrutiny is interpreted as obstruction. Financial prudence is mistaken for institutional self-preservation.

Yet history suggests that democracies are strengthened not by bypassing governance but by insisting upon it.

South Africa certainly needs faster electricity reform. It needs investment, infrastructure and confidence that the grid will support economic growth for decades to come.

It also needs reforms capable of surviving court scrutiny, satisfying lenders, protecting public finances and maintaining institutional stability.

Those objectives are not contradictory.

They are complementary.

The future of Eskom will not ultimately be secured by whichever side wins the public relations battle. It will be secured by decisions that withstand legal scrutiny, preserve financial sustainability and command public confidence long after today's political arguments have faded.

That is the difference between making headlines and making history.

And in the end, history tends to remember governance far more kindly than rhetoric.

Writes in own personal capacity