JOHANNESBURG – Power utility Eskom is set to have its 13th chief executive since 1994 after the resignation of Phakamani Hadebe on Friday, which laid bare the toxic nature of what is arguably the toughest job in South Africa.
Hadebe, in a frank statement, said that the job to turn around the fortunes of the debt-laden power producer had had a negative impact on his health.
“It’s no secret that this role comes with unimaginable demands, which have unfortunately had a negative impact on my health. In the best interests of Eskom and my family, I have therefore decided to step down,” said Hadebe.
Reports over the weekend said Hadebe had previously collapsed in his office. However, Eskom yesterday denied the reports.
“Mr Hadebe has not collapsed in his office at any point,” said Lwanda Zingitwa, chief of staff at the office of Eskom’s chairperson.
Eskom said Hadebe would vacate his office at Megawatt Park at the end of July.
He was appointed in February last year amid fanfare that he was the right man to bring Eskom back to health after his previous successful stint at turning around Land Bank. But he soon found out that getting Eskom back on its feet was a mean task, with numerous teams appointed under his watch as the utility struggled to power the ailing economy.
Eskom has R440 billion of debt, of which R273bn nominal value is government guaranteed and isn’t selling enough power to cover its interest payments and operating costs, a legacy of years of mismanagement and cost overruns on new plants.
The group this month said funding plans aimed at borrowing R46bn during the 2019/20 financial year from “various sources.”
In April Hadebe said the R69bn (Eskom wanted R100bn) allocated to it by the National Treasury in February and the tariff increase awarded to it by the energy regulator had left Eskom with a R250bn shortfall.
Energy expert Ted Blom said the resignation came as no surprise.
“As an outsider with zero industry knowledge, he had nearly zero chance of being accepted as a leader by Eskom, which has had many casualties along similar lines,” Blom said.
“The only chance of saving Eskom is to appoint a former Eskom leader who has industry experience and is street wise and has a clear vision as to where Eskom needs to be positioned, as well as a clear mandate to follow the necessary strategy to get Eskom to its goal destination. Otherwise, Eskom is toast.”
National Treasury is in the process of appointing the utility’s chief reorganisation officer with erstwhile Absa chief executive Maria Ramos said to be the favourite for the role as Eskom unbundles its business into three entities responsible for generation, distribution and transmission.
Eskom has not had a chief executive who completed their full term since Thulani Gcabashe’s contract came to an end in 2007.
His successors left either due to personal reasons, were fired or under a cloud of corruption, which saw the entity at the heart of state capture allegations.
Eskom chairperson Jabu Mabuza said Hadebe had tried to ensure stability “during a very challenging period” at the utility.
Hadebe has also had numerous run-ins with trade unions, which fiercely opposed his plans to cut Eskom’s bloated workforce.
A World Bank study in 2016 found that Eskom was potentially 66 percent overstaffed.