‘Tshwane must privatise power stations outright,’ FMF tells City after power station lease proposal


 

10 October 2023
RELEASE IMMEDIATE

ENQUIRIES / INTERVIEWS

Anneke Burns

press@fmfsa.org

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rights clause: a critical cornerstone of economic freedom.

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‘Tshwane must privatise power stations outright,’ FMF tells City after power station lease proposal

‘The business-as-usual approach is fraught with risk, which is why the FMF has proposed that Tshwane either privatise the power stations outright, or subject them to a stateproof lease.’ – Martin van Staden, Head of Policy at the Free Market Foundation
 

Scroll af vir Afrikaanse weergawe.


In its submission yesterday to the City of Tshwane, the Free Market Foundation (FMF) has proposed that the municipal government wholly privatise the old Rooiwal and Pretoria West power stations, or alternatively formulate a lease agreement that is resistant to malicious political actors down the road.
 
This comes after the City signalled its intention to lease the decommissioned power stations to private sector operators to begin generating electricity once more.
 
The FMF welcomes the City’s initiative. It has long been clear that the increasingly incapacitated state alone would not be capable of solving the countrywide electricity crisis that it spawned with its monopolistic activities, and that significant private sector involvement would be required.
 
‘Nonetheless, the FMF is concerned that the initiative appears to (unduly) assume the premise that the power stations must remain the owned property of the City [and assumes] that South African politics, moreover municipal politics, is generally sensible and benign,’ writes Martin van Staden, FMF Head of Policy, in the submission to the City.
 
The FMF warns that while the current government of Tshwane might look positively upon an independent operator generating electricity for the grid, future administrations could conduct themselves maliciously and undermine the operators or even cancel the lease for partisan reasons.

‘The business-as-usual approach is fraught with risk, which is why the FMF has proposed that Tshwane either privatise the power stations outright, or subject them to a stateproof lease,’ says Van Staden.
 
Outright privatisation of the Rooiwal and Pretoria West power stations is the FMF’s preferred policy outcome. This would remove politically partisan considerations entirely from the new operators’ decision-making processes, and allow them to focus exclusively on generating electricity for profit. The City could include a restrictive condition in the sale, requiring that, while the properties will be private, they nonetheless must be used to generate electricity.
 
As a next-best option, the FMF suggests a ‘stateproof’ lease, meaning an agreement that protects the operators – and enables the operators to protect themselves – from future political harm or hostility.

Such a lease agreement, the FMF argues, should be extended from the currently proposed 40 years, to 99 years, to place ‘the expiry of the lease well outside of the current “era” of South African politics with all its associated malices and score-settling.’
 
The lease must also be unilaterally renewable by the operators, and the ability of the City to cancel the lease must be strictly limited.
 
‘The lease must specify that the lessees are the ones to manage and operate (on a source agnostic basis) the power stations, not the City. This should be a lease in its true sense, not a service level agreement,’ continues the submission.
 

Click here to read the FMF’s full submission.
 

Click here for a soundbite by Martin van Staden.
 
Ends.

Media enquiries 

Anneke Burns
FMF Publicist 
071 423 0079 |
press@fmfsa.org 


***

 

‘Tshwane moet kragstasies volledig privatiseer,’ sê FMF aan Stad ná kragstasie-huurvoorstel

‘Die business-as-usual-benadering is riskant, daarom het die FMF voorgestel dat Tshwane die kragstasies óf volledig privatiseer óf dit aan ‘n staatsbestande huurkontrak onderwerp.’ – Martin van Staden, Beleidshoof by die Vryemarkstigting
 

Scroll up for English version.


In sy voorlegging gister aan die Stad Tshwane het die Vryemarkstigting (FMF) voorgestel dat die munisipale regering die ou Rooiwal- en Pretoria Wes-kragstasies heeltemal privatiseer, of alternatiewelik ‘n huurooreenkoms formuleer wat bose politieke rolspelers in die toekoms kan weerstaan.
 
Dit kom nadat die Stad aangedui het dat dit van plan is om die uitdiensgestelde kragstasies aan privaatsektor-operateurs te verhuur om weer elektrisiteit op te wek.
 
Die FMF verwelkom die Stad se inisiatief. Dit is al lank duidelik dat die toenemend onbekwame regering nie alleen in staat sou wees om die landwye elektrisiteitskrisis wat dit met sy monopolistiese aktiwiteite veroorsaak het op te los nie, en dat die privaatsektor op betekenisvolle basis sal moet ingryp.
 
‘Nogtans is die FMF bekommerd dat die inisiatief lyk asof dit (onnodig) aanneem dat die kragstasies die eiendom van die Stad moet bly [en aanneem] dat Suid-Afrikaanse politiek, veral munisipale politiek, in die algemeen sinvol en welwillend is,’ skryf Martin van Staden, FMF Beleidshoof, in die voorlegging aan die Stad.
 
Die FMF waarsku dat terwyl die huidige regering van Tshwane positief mag wees teenoor ‘n onafhanklike operateur wat elektrisiteit vir die netwerk genereer, toekomstige administrasies hulle kwaadwillig kan gedra en die operateurs kan ondermyn of selfs die huurooreenkoms om politieke redes kan kanselleer.
 
‘Die business-as-usual-benadering is riskant, daarom het die FMF voorgestel dat Tshwane die kragstasies óf volledig privatiseer óf dit aan ‘n staatsbestande huurkontrak onderwerp,’ sê Van Staden.
 
Die FMF se voorkeur-beleidsuitkoms is dat die Rooiwal- en Pretoria Wes-kragstasies heeltemal geprivatiseer word. Dit sal polities-partydige oorwegings heeltemal verwyder uit die besluitnemingsproses van die nuwe operateurs en hulle in staat stel om uitsluitlik daarop te fokus om elektrisiteit vir wins op te wek. Die Stad kan ‘n beperkende voorwaarde insluit in die verkoop, wat vereis dat die eiendomme privaat sal wees, maar dat dit steeds gebruik moet word om elektrisiteit op te wek.
 
As ‘n tweede beste opsie stel die FMF ‘n ‘staatbestande’ huurooreenkoms voor, wat ‘n ooreenkoms behels wat die operateurs beskerm – en die operateurs in staat stel om hulself te beskerm – teen toekomstige skade of vyandigheid vanuit politieke oorde.
 
Sodanige huurooreenkoms, meen die FMF, behoort van die voorgestelde 40 jaar verleng te word tot 99 jaar, om ‘die verval van die huurooreenkoms ver buite die huidige “era” van Suid-Afrikaanse politiek met al sy geassosieerde boosheid en griewe te plaas.’
 
Die huurooreenkoms moet ook eensydig hernieubaar wees deur die operateurs, en die Stad se vermoë om die huurooreenkoms te kanselleer moet streng beperk wees.
 
‘Die ooreenkoms moet stipuleer dat die huurders dié is wat die kragstasies bestuur en bedryf (op ‘n bronagnostiese basis), nie die Stad nie. Dit moet ‘n ware verhuring wees, nie ‘n diensvlak-ooreenkoms nie,’ lui die voorlegging.
 

Kliek hier om die FMF se volledige voorlegging te lees.
 

Kliek hier vir ‘n klankgreep deur Martin van Staden.
 
Einde.

Persnavrae

Anneke Burns
FMF Publisiteitsbeampte
071 423 0079 |
press@fmfsa.org
 



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