A Sept. 29 report from Frost & Sullivan outlines how Eskom’s constant tariff hikes is hurting South Africa’s poor the hardest: “Despite the ostensibly legitimate reasoning behind the Eskom tariff increases, these raised costs will undoubtedly hurt those in the lower portion of South Africa’s income distribution.”

“The tariff increases have grown from a modest rate of 5.1 percent in 2006/2007 to a peak of 31.3 percent in 2009/2010. These tariff increases were generally at rates above the Consumer Price Index (CPI) and as such, elicited harsh backlash from the general public,” states the report, which notes South African tariffs remain low compared to the rest of the world.

“With the country’s real Growth Domestic Product (GDP) coming in at a meager 1.4, South Africa can ill-afford a power system that continues to be significantly constrained. The partial privatization of Eskom and the involvement of other independent power producers is now a mathematical inevitability. The status quo is simply no longer affordable,” argues the statement from the Democratic Alliance.

Despite an attempt to introduce independent power producers into South Africa, Eskom still dominates electricity generation in South Africa, as well the transmission and most of the distribution grid.

According to the Aug. 2014 Frost & Sullivan report, The South African Electricity Industry–ISMO and the Road to Reform, the first step towards the end of Eskom’s monopoly is “Opening up the power generation sector to independent power producers is imperative as Eskom has shown some of its limits, such as severe funding shortfall, an extremely tight power system, and new-build projects being continuously delayed while power demand shoots. The dominant position of Eskom in power generation, transmission, and distribution prevents third parties from having an open and equal access to the transmission grid.”

According to the report, the South Africa Department of Energy introduced the Independent System and Market Operator (ISMO) Bill aimed at transferring some functions from Eskom to another independent state-owned entity, with the primary objective to “encourage independent power producer participation in power generation in order to alleviate the electricity supply crisis.”

The draft bill was first published for public comments in 2011, with an amended version released in 2012. But despite being close to adoption by Parliament in 2013, the bill was withdrawn pending further amendments.

“This resulted in the despair of many interested (private) parties. Certain stakeholders believe it to be an outcome of political interests in protecting Eskom’s control over the country’s electricity transmission grid,” according to Frost & Sullivan.

“The thing is, the ruling party – the ANC – is very divided on these kind of things; on kind of a more liberal, privatization free-market versus stronger state control,” Cooke told AFKInsider. “So, I think South Africa has a double challenge, which is getting the most able and competent to lead those parastatals, and/or privatizing them.”