Johannesburg - Eskom, along with other state-owned enterprises, lacked efficient management and no matter how much money was thrown at them, this would not solve the problems they faced, former finance minister Trevor Manuel said.
Speaking at the Sandton Convention Centre yesterday, at the Sanlam i3 Summit, Manuel said it was a tragedy that the level of management at Eskom and other state-owned enterprises had deteriorated.
Turmoil
Manuel said during his tenure in cabinet, the government had never given Eskom subventions from the fiscus, but only paid for the extension of electrification to communities that had been previously excluded from the grid.
Manuel’s cabinet career spanned two decades from 1994 to 2014. He started out started as the Minister for Trade and Industry followed by two terms as Finance Minister and then later as Minister in the Presidency. He is currently the deputy chairman at Rothchilds South Africa.
“Unless you deal with the management issues, you think its a money matrix. But regardless of how much money you throw at the issue, you can’t sort out this large complex corporation that can generate and transmit and distribute energy, that can fund itself,” he said.
“While I was the Minister of Finance, they raised their own resources against the balance sheet and the only thing we paid for was the extension of electricity to communities that were previously excluded from the grid.”
Manuel’s comments come as state-owned enterprises, including Eskom, SAA, PetroSa and SABC, all grapple with management problems and the resignation of executives.
The latest resignation was from the Department of Telecommunications and Postal Services’ deputy director-general Sam Vilakazi as a result of difficult working conditions allegedly caused by director-general Rosey Sekese. This has thrown the department into further turmoil.
A case study
“I think that Eskom itself is a case study, an interesting case study, because Eskom by 1994-1995 was owned only by consumers,” Manuel said.
“It wasn’t a private sector corporation nor was it a state-owned corporation. By 2000 Eskom had a stronger credit rating than the sovereign had.
“Part of what has happened is that I don’t think the demand pattern has changed; I think that the problems of Eskom and the energy equation are largely on the supply side,” he added.
“For me one of the biggest tragedies was what happened at Duvha power station last year when they were stress testing the turbines and blew the head off simply because people are not properly engaged and I think those are managerial problems,” he said.
“As managerial problems kick in you also have then maintenance problems.”
Part of what had happened at Duvha and at the Majuba power station – where a coal storage silo collapsed late last year – and issues around the quality of coal being supplied, were complications arising from the parastatal’s management problems, he said.
“These changes happen in a very short space of time and I think the message there is that repair can happen in a short space of time provided you take appropriate actions within the corporation,” Manuel said.
He said the fact that the same thing could be applied to a number of other state-owned enterprises, meant the country was going through “a deep, deep tragedy”.
BUSINESS REPORT