Business Leadership South Africa (BLSA) and Eskom, which have recently expressed public disagreement over the nature of the unbundling of the State-owned utility, have issued a joint statement in support of creating a Transmission System Operator (TSO) with the grid assets, while committing to engage over differences regarding implementation.

The two organisations have been at loggerheads over Eskom’s reticence regarding a government-endorsed reform to create a separate State-owned TSO outside of Eskom, with grid assets valued at some R110-billion.

This vision was endorsed in a Phase 1 report by the Eskom Restructuring Task Team set up following President Cyril Ramaphosa’s State of the Nation Address, in which he directly contradicted an Eskom plan to create a TSO to operate the transmission system and market, but where the grid assets would remain under the ownership of an Eskom Holdings subsidiary.

Since the President’s subsequent endorsement of the Phase 1 report, BLSA reiterated its position that the creation of a separate entity, with the grid assets, was essential for levelling the playing field in an evolving competitive electricity market.

However, Eskom, mostly through its chairperson Mteto Nyati, continued to raise the risks of such a transfer for Eskom and its bondholders and persisted with the view that the TSO should be established initially without those assets.

In a joint statement the two organisations indicated that there had been “direct and constructive engagement” on the electricity reform programme and the challenges of implementing it, which had been initiated by Nyati.

“Both organisations fully support the electricity reform programme under the government's leadership, including the work of the Eskom Restructuring Task Team and the Phase 2 process now under way,” the statement reads.

“We support the outcome endorsed by the President following the Task Team's first-phase report – the establishment of an independent TSO with the transmission assets – implemented through a carefully sequenced process that safeguards Eskom's financial sustainability, respects the rights of lenders, and protects the country's energy security.

“We regard successful reform and a financially sustainable Eskom as complementary objectives, not competing ones,” it adds.

Eskom and BLSA also acknowledged that they would not always agree on every aspect of implementation, however.

“Where differences arise, we are committed to engaging directly and on the substance.

“Accelerating South Africa's economic growth rate and the jobs that depend on it require these reforms to succeed, and both organisations are committed to playing their part in making that happen.”