CLIENT
DfID / Department of Public Enterprises (DPE), South Africa
TITLE
Team Leader
COUNTRIES
South Africa
DATES
2001 - 2002
SECTOR
Electricity
PROJECT DESCRIPTION
The Republic of South Africa wished to tackle the issues of economic reform and, in particular, the perceived need for parastatal utility (the State remains a dominant player through its shareholdings in the energy sector) restructuring and divestment/privatisation. This desire was driven by the perceived inefficiencies and overstaffing associated with parastatal monopoly incumbents (which are isolated from competition) as well as policy difficulties resulting from the dual and conflicting objectives of maximising the profitability of its state-owned utilities whilst at the same time seeking to ensure tariffs are kept low enough to be affordable.
SERVICES PROVIDED BY STRATEGY & ECONOMICS
Strategy & Economics led Phase One of a project advising the Department for Public Enterprise in South Africa on options for restructuring the electricity supply industry, notably the state-owned operator, ESKOM.
In addition to producing proposals for the separation of generation and transmission assets, the work also required investigating the type of mechanisms which should be used for the divesting of generation to South Africans (including opportunities for Black Economic Empowerment) and for divesting to international players and evaluating the impact of the restructuring strategy on ESKOM, especially with regard to its ability to compete internationally.