what is the market structure of the electricity supplier in south africa?
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Discusses the reform history of Eskom, South Africa’s generation and transmission monopoly, one of the largest power supply companies in the world. The existence of this monopoly reflects a historic national policy of concentrating supply arrangements under state ownership to obtain economies of scale and ensure availability of the huge amounts of required financing at affordable terms, under which competition and private participation is not considered for the provision of infrastructure services. Currently, Eskom also supplies about 60 percent of total distribution, with the rest supplied by numerous municipalities that buy most of their bulk power needs from Eskom. Reforms took shape when Eskom’s economic performance deteriorated in the 1980s and most of the population lacked access to electricity. Little progress has been achieved in efforts to restructure the distribution sector into larger and more economically efficient units, nor has the government proceeded with more substantial forms of unbundling or other reforms envisaged in 2001 proposals, partly because of opposition by labor unions.
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