Four reasons not to privatise ESKOM
Follow @AfricaBizReview on Twitter.
In our previous post we explored the possible benefits of privatising South Africa’s state utility ESKOM; to provide balance we will also be exploring the potential disadvantages that privatisation could bring.
1. Competitive façade
Since energy can often have fixed costs, the scope for competition between smaller energy providers is significantly reduced. Potential worst case scenario for consumers could be a range of similar energy companies all offering the same inflated price for energy, which has been seen in the United Kingdom.
2. Reduces government revenues
Privatising ESKOM would certainly increase government revenues, for a short term; shifting these revenues from the government to the private sector would mean that the long term cash flow would not go straight to the treasury, who would only take a portion through taxation.
3. Job losses
For private companies, the bottom line will always be providing returns to shareholders and boosting profits which could mean that untold numbers of skilled workers could lose their jobs and become dependent on government welfare programmes, thus increasing costs for the state.
4. Short termism
In our last piece, we noted that politicians were often prone to short termism but the same can often equally apply to those in the private sector. It could very well be the case that a company is reluctant to invest in new generation facilities if the profit potential is not high enough.
MORE ON ESKOM FROM ABR:
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.