A Case Study Approach
Edited by Christine A. Mallin
12. The structure and governance of Eskom – a case study* Reuel J. Khoza and Mohamed Adam INTRODUCTION Eskom Holdings Limited (Eskom) is the national power company in South Africa and is currently amongst the largest electricity companies in the world. It is a 100 per cent state-owned enterprise that existed as a statutory juristic body (that is, an entity that existed by virtue of an Act of Parliament, the Eskom Act No. 40 of 1987) and was converted into a company in 2002. This chapter traces the developments through the conversion process. It suggests that the structuring of state-owned enterprises within a company law framework has distinct advantages. BACKGROUND The story of Eskom (Morgan 1994; Conradie and Messerschmidt 2000 – the history is summarized from this publication) starts with the origins of electricity in Africa. The supply of electricity in South Africa started with mining being the catalyst for development – both the discovery of the rich diamond ﬁelds in Kimberley in 1866 and the discovery of gold in what was then the province of Transvaal in 1886. Energy for mining activities was initially produced from steam engines, but a scarcity of ﬁrewood and the costs of transporting wood over long distances soon prompted the search for alternatives. The rich mineral deposits provided an alternative in the form of coal and in 1894 a company called Simmer and Jack Mines was granted a concession by government to supply power for its own use and that of ﬁve adjacent mines. What is significant...
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