FT Film (2023) ¦ Eskom: How Corruption and Crime turned the Lights off in South Africa

Eskom’s Collapse: How Corruption and Crime Turned the Lights Off in South Africa

For more than a decade South Africans have lived with load shedding — recurrent, scheduled power cuts intended to prevent a total grid collapse. What began as periodic interruptions has become a chronic national crisis with deep economic, social and political consequences. Eskom, the state-owned utility that supplies roughly 80% of the country’s power, has gone from being a driver of industrialisation to an indebted giant hamstrung by aging plants, mismanagement and a culture of graft. Across cities and townships, businesses, hospitals, schools and households are paying the price: productivity is down, small enterprises are squeezed out, crime rises and everyday life is disrupted.

How a national asset unravels

Eskom traces its origins to 1923, built to electrify mines and heavy industry. Under apartheid it largely served white households; after 1994 the company achieved a massive expansion of access, connecting millions of previously excluded homes. Yet structural warnings about generation capacity were ignored. By the late 1990s officials anticipated capacity shortfalls by 2007; political priorities and competing social needs diverted attention and investment from plant maintenance and new capacity. The state’s reluctance to open generation to private players kept Eskom in a monopolistic position even as its fleet aged and performance declined.

The Medupi and Kusile projects exemplify the problem: conceived in the mid-2000s to add large-scale coal capacity, both stations were beset by delays, cost overruns and corruption, and today neither operates as intended. Over time neglect and malfeasance hollowed out technical competence and maintenance culture, leaving equipment layered in coal dust, cables in disrepair and processes broken.

Organised crime, cartels and the capture of a utility

State capture during the Zuma era accelerated the decline. Political networks placed allies in strategic positions, steering lucrative contracts to connected firms.

Private cartels worked with insiders to defraud Eskom at scale:

• inferior coal consignments were delivered while good coal was diverted and sold on the side;
• invoices were generated through fraudulent round trips;
• essential spares and even basic safety gear were grossly overpriced.

Internal investigators uncovered multiple criminal syndicates and estimated theft at roughly a billion rand per month — a conservative figure with catastrophic cumulative effects.

Bastian Schwind-Wagner_Follow "Eskom’s collapse is the product of decades of underinvestment, entrenched corruption and political interference; addressing it requires decisive institutional reform, transparent prosecutions of wrongdoing and a carefully managed transition to renewable energy that protects coal-dependent communities."

Whistleblowers and reformers faced fierce resistance. Andre de Ruyter, recruited from the private sector to try to turn Eskom around, encountered appalling plant conditions and entrenched corruption. His anti-corruption drive exposed cartels but also brought threats to personal safety — including an apparent attempt to poison him with cyanide-laced coffee. Attempts to arrest and prosecute implicated actors were frequently stymied by compromised institutions: police, prosecutors and regulators weakened by the same era of capture. Management turnover at Eskom became relentless; the CEO post became widely viewed as a poisoned chalice.

Everyday costs: economy, inequality and crime

Load shedding is not an abstract policy problem; it is a drag on GDP, a source of inflationary pressure and a deepener of inequality. The Reserve Bank cut growth estimates in recognition of its economic toll. For small traders and households the costs are immediate: lost sales when card machines fail, spoiled food, inability to charge phones, interrupted schooling and healthcare services, and higher operating costs for firms that rely on diesel generators. Larger companies, such as major retailers, can invest in backup generation and rooftop solar, but small businesses cannot, widening the gap between those who can afford resilience and those who cannot.

Crime rises when light and security systems fail. Cable theft, vandalism of substations and opportunistic burglaries become commonplace during outages, further degrading infrastructure and increasing safety risks. Private security firms proliferate in affluent areas, while poorer neighborhoods endure a combination of electricity shortages, joblessness and social dislocation that feed criminality and social despair.

Policy fault lines: coal, transition and politics

Eskom’s crisis is technical and criminal but at root it is political. The ANC’s historical links to mining and the coal value chain complicate a rapid shift away from coal. Coal businesses have been central to the rise of a black-owned business class, and thousands of jobs and local economies depend on mines, truckers and related industries. This creates powerful resistance to an uncompromising transition, even as renewables become cheaper and faster to deploy.

Under President Ramaphosa, policy has shifted: Eskom is being unbundled into separate generation and transmission entities, the cap on embedded private generation was removed and regulatory barriers to private renewable projects have been lowered. These reforms have catalysed a boom in private renewable investment and rooftop solar, offering a path out of load shedding. But the transition brings trade-offs: loss of revenue for Eskom could accelerate its “death spiral,” threatening municipal income and the coal-sector livelihoods many politicians rely on. The state also faces a financing gap: an estimated US$20–25 billion is needed to expand and reinforce transmission lines over the next decade to move renewable power from remote sites to demand centres.

Repairing institutions and restoring confidence

Effective recovery demands three things:

• restoring competence and maintenance in Eskom’s generation fleet;
• rebuilding law enforcement and prosecutorial capacity to pursue corruption; and
• unlocking investment in transmission and clean generation at scale.

Some progress is visible: reforms have spurred private projects, and debt relief measures have stabilised Eskom’s balance sheet to some extent. Yet timelines are tight. Experts warn that if load shedding cannot be ended within two years, extending the life of coal plants merely prolongs environmental damage and may still fail to close the capacity gap.

Social justice in the transition must be managed. A credible “just transition” requires planning for coal-dependent communities and retraining workforces into growing green sectors — solar, wind, batteries and electric vehicles. International finance and technology partnerships could ease the fiscal burden of decommissioning coal and fast-tracking renewables, but political will and institutional capacity are essential.

Is there a light in the dark?

There are reasons for cautious optimism: technological improvements and regulatory reforms can deliver new capacity faster than new coal plants ever could. Private investment is already flowing, and decentralised rooftop systems are reshaping consumption patterns. But the speed and inclusiveness of the transition will determine whether South Africa escapes protracted decline or enters a prolonged period of economic and political instability. For many citizens, the measure of success is simple and immediate: are their lights on? For a nation that once electrified a continent, restoring reliable power is central to economic recovery, social cohesion and political legitimacy.