Department denies part in Dames’ decision

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Independent Newspapers

Brian Dames. File photo: Leon Nicholas

Johannesburg - The Department of Public Enterprises put speculation about Eskom chief executive Brian Dames to rest yesterday when it said it had no hand in his decision to step down.

“This is not a shareholder clean-up. We are not over the moon for losing a person of his talents, but the board has accepted his resignation,” said Mayihlome Tshwete, the ministerial spokesperson in the department.

Eskom announced during the presentation of its financial results yesterday that Dames would be leaving in March for personal reasons.

Although the Minister of Public Enterprises, Malusi Gigaba, said earlier this year that “heads will roll” if there were further delays to the commissioning of Eskom’s Medupi power station, Tshwete said the minister valued Dames’ leadership and knew he had inherited big problems.

In a statement, Gigaba said: “Mr Dames steered the company meticulously with integrity, despite the many challenges he managed to keep the company stable.”

The announcement of Dames’ resignation was a second blow for Eskom as the company’s financial director, Paul O’Flaherty, was due to leave in July. His resignation was announced earlier this year.

Tshwete said the shareholder believed there would be stability in the company. “Stability is not confined to Paul or Brian. We are not going to have, at any point, a ship without a captain.”

Eskom spokesman Andrew Etzinger said that the process of looking for Dames’ successor was under way, but could not indicate if any names had been shortlisted.

Electricity analyst Chris Yelland from EE Publishers said Eskom’s problems were bigger than one man. “It’s a severe blow that he’s leaving after only three years. It creates room for anxiety when you think that Paul, where they’ve worked as a team in the new build programme, is also leaving. For both to jump ship at such a critical time, to me, it signals a problem brewing.”

Yelland said the two executives probably came to a stage where they questioned why they should subject themselves to the burden they were carrying where they were torn apart between the principles of the Public Enterprises Department, the Department of Energy and the lack of decision-making by the government.

“We know that in state-owned companies, sometimes decisions are forced on you, decisions that you know are wrong. We hope and pray the new appointments won’t be political deployment,” he said.

Mike Schüssler, the chief economist at Economists.co.za, said there was no doubt that Dames was a better leader for Eskom than his predecessors, but added that the problem was not whether others were bad leaders or not.

“Whoever is put in that position is in an unfortunate situation. People want power, the money is not easy to get. What we are really in need of is political leadership more than business leadership. Currently, the leadership is not making life easy for executives at Eskom,” he said.

The SA Chamber of Commerce and trade union Solidarity praised Dames for sticking to his promise of “keeping the lights on”.

In the three years Dames served as chief executive, the company set a target to spend R500 billion through 2017 to build new power stations and replace aging equipment.

Yesterday, Eskom posted a R12.24bn profit for the six months to September. This presented a marginal decline from R12.63bn in the comparable period last year, as primary energy costs pushed up the company’s operating expenditure. The primary energy costs increased 28.3c per kilowatt hour, a 25.3 percent increase from last year.

Eskom generated each kilowatt hour of electricity for 55.3c and sold it for 69c, compared with 64.9c last year. - Business Report


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