The Pros And Cons Of Eskom

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Eskom has relentlessly stunted the South African economy. Eskom, being the sole electricity provider for South Africa has fallen behind. Demand has drastically exceeded supply and thus has caused economic growth to become stagnant. Although there are several advantages to the monopoly, they are heavily outweighed by the disadvantages. It has become clear that competition needs to be created in the electricity industry to increase supply and prevent the infamous power failures in South Africa.
Eskom holding monopoly position
A monopoly has certain characteristics, namely being the sole provider in the market, enjoying abnormal profits, having freedom to control prices, being protected by high entry barriers, and having no close substitutes (unknown, 2012).
By fulfilling the characteristics listed above, Eskom can be classified as a monopoly. It first became clear that Eskom was unable to cope with high electrical demand in 2008, when load shedding was firstly introduced in South Africa. Factories, businesses and family households were all forced to suffer lengthy power outages and power rationing. (Krupa & Burch, 2011, p. 6254)
Furthermore, Eskom regularly operates at peak capacity
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Without this interest Eskom is sacrificing a major advantage towards the South African economy. The problem with Eskom is the fact that the organizations management did little to prepare for the increase needs which were inevitable and as such their strategic plan was limited to crisis control as opposed to strategic plans which would enable the utility the ability to plan for and accommodate what was an unavoidable increase in the number of households which, as part of the Government’s RDP plan, they would have

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