Eskom: A Monopoly Case Study

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The task of national electrical supply falls solely unto the shoulders of the monopoly Eskom and regardless of circumstances or position have failed to adequately and consistently provide electricity. That is why Eskom as a monopoly is unsustainable from an efficiency and delivery point of view. In terms of the organisations position as a monopoly in South Africa the defects and flaws have become increasingly clearer. Argument Eskom as the single source for industrial and domestic electrical needs means they are provided the enormous task of sustaining electricity levels throughout the country. Since 2008 the electrical crisis sat where demand drastically out weighed supply, largely due to the export of South African coal. The failure of their…show more content…
As previously discussed were Eskom slightly more profit orientated it provides an incentive for better management and work ethic. Eskom is then able to generate enormous amounts of profit as a monopoly which than can then be used to fund other investments like the construction of other plants while not harming tax payers pockets. This will lead to a greater output, which means a decrease in the cost of electricity, which is a positive for consumers on two fronts. Eskom is a state owned enterprise and its goal is equal access to electricity at fair costs nationwide, with the introduction of competitors it may damage this objective, as other independent firms will be mainly price orientated and competition for market space and supplies could be more harmful then…show more content…
Do we accept the uncertainty or availability of electricity despite our tax and tariff increases or do we eliminate Eskom as the sole provider of electricity? South Africa since 2008 has lost economic revenue worth R300 `Billion and continues to escalate (Zille, 2015). The problem we face as a country will definitely take time to correct and resolve thus the importance of opening the market to independent electricity suppliers to ensure that the shortage and demand of electricity is corrected. With the introduction of new organisations this could pave the way to alternative more environmentally conscious means of energy mainly renewable energy. A great example would be the success story of Germany who have effectively used solar panels to generate clean power and provided users with more options in terms of electricity, South Africa who has over eight hours of usable sunlight could benefit from a project such as this. Eskom however plans to continue to invest in coal infrastructure despite environmental consequences this posses a serious threat to environmental
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