Prior to President Cyril Ramaphosa’s decisive State of the Nation (SoNA) intervention in relation to Eskom’s unbundling, a marked difference had emerged in how Eskom and Transnet were being measured against their respective reform milestones. The State electricity producer was being adjudged, correctly, as backsliding, while its freight logistics counterpart was mostly being praised for making progress in opening the port and rail networks to private participants.

For instance, the latest Operation Vulindlela quarterly report assigned a green colour code (representing progress) for all the logistics reform components it monitors, albeit with some delays. By contrast, two of the five electricity reforms – completing the restructuring of Eskom, and reforming the distribution industry – were colour-coded orange, indicating that the reforms faced significant challenges. The distinction was starker in the Reform Tracker published by Business Leadership South Africa, which highlighted “concerning backwards movement in the critical electricity sector”.

The regression was attributed primarily to the revised unbundling plan for Eskom unveiled in December, which Ramaphosa now wants overhauled. On Transnet, by contrast, the BLSA publication asserts that the economic reforms had advanced “encouragingly” during the period. The pressure on Eskom has arisen despite an impressive turnaround in the performance of its power stations, which has taken the country out of loadshedding. However, it arguably also reflects the relative maturity of the reforms under way in the electricity sector, compared with those in freight logistics.

True, Transnet has made remarkably rapid vertical-separation progress, especially in the area of rail. The uncoupling of train operations from infrastructure has allowed for the release of a Network Statement that has facilitated the allocation of slots to the first 11 private train operating companies, seven of which are expected to start operations in the first quarter of 2027.

In the electricity sector, though, there are already hundreds of independent power producer-owned generators, with an increasing number of these having advanced on the basis of private power purchase agreements. Hence, the current stage of electricity restructuring necessarily involves changes that are more fundamental and more disruptive to the incumbent. Once the logistics reforms advance to such a stage, Eskom-like backsliding is quite possible as they will also begin posing a threat to Transnet’s dominance.

This risk is being amplified by the prevailing political-economy ecosystem in which the reform of State companies is taking place; one where responsibilities for policymaking and shareholding have been collapsed into single line departments. Following the closure of the Department of Public Enterprises, this moral hazard was meant to be dealt with through the establishment of a holding company for South Africa’s State-owned enterprises. Such a structure has not been set up, even though Ramaphosa referenced the National State Enterprises Bill in his SoNA.

This leaves the Ministers in the conflicted position of having to make complex choices that either favour the sector, or the incumbents. And any course correction is left to civil society – and in the Eskom case, the President – rather than clearly delineated governance structures.