Organisation Undoing Tax Abuse CEO Duvenage highlights costly repercussions of preventing load shedding
South African citizens are facing an uncertain time as a ruling by the North Gauteng High Court has ordered that hospitals, schools and police stations be spared from load shedding, threatening the provision of regular electricity supply across the country and severely impacting taxpayers.
Opposition political parties, labour unions and civil action groups brought a case against Eskom, arguing that load shedding is unconstitutional and that the government is not adequately fulfilling its duty to ensure citizens’ rights to healthcare, security and education. As a result, a full bench of the High Court specified that public enterprise minister Pravin Gordhan must “take all reasonable steps within 60 days” to prevent energy supply interruption from load shedding.
The technical feasibility of isolating sites like hospitals, schools and police stations from the electrical grid to exempt them from load shedding has plunged Eskom into a crisis, leading to questions about alternative solutions. Eskom and the government have decided that the only viable solution is providing generators to these vital facilities. However, Organisation Undoing Tax Abuse CEO Wayne Duvenage highlights the extensive costs it will take to procure and run these generators.
“The hospitals and police stations are funded by general taxes,” Duvenage said. “It’s not just the generators; it’s the diesel.”
Former Eskom general manager Alwie Lester also pointed out the issue with this solution, stating that “there are several thousand schools, hospitals and police stations around the country. There would be the capital costs and the running costs of generators which, in my view, would run into the millions, nationally. Not sure who pays for this.”
Eskom’s legal team is studying the court ruling, which is also still under review by the presidency. The decision presents a huge risk to the stability of the grid and the country’s fiscus. With taxpayers already struggling to maintain obligations, an additional tax to fund generators and diesel seems inevitable.