JOHANNESBURG - The new Eskom board has had a whirlwind first week in office as it began the mammoth task of fixing the troubled power utility.
This week marked an important turning point in the efforts to revive the fortunes of a crucial public entity so mired in mismanagement and corruption scandals that it is not far fetched to question its going concern status. But, for the first time in a long time, there is a remarkable political will to wrestle with Eskom’s problems.
Appointed last weekend, the new Eskom board - under the leadership of respected businessman Jabu Mabuza - does not have the luxury of time. Eskom is imploding and is the biggest risk to the South African economy.
Eskom’s financial woes are well-documented. The utility is practically racing against time to meet a month-end deadline for the release of an interim report for the six months ended September 30 last year. The report will only confirm what everyone knows - that Eskom’s liquidity has deteriorated and that the cupboard is almost bare. The JSE has threatened to suspend the listing of Eskom bonds if the utility did not meet the January 31 deadline. International and local bonds are an important source of funding to Eskom.
Eskom must borrow about R60 billion a year in the next four years in order to complete its new build programme. Public Enterprises Minister Lynne Brown and Mabuza met on Wednesday this week to discuss the utility’s immediate priorities. The priorities are not difficult to figure out, though.
Mabuza and his board must immediately stymie Eskom’s meltdown. To do this, they need to ensure that the utility is stable. Eskom has not had a permanent chief executive since Brian Molefe controversially (and tearfully) left in December 2016 in the aftermath of the explosive Public Protector report on state capture. The current acting chief executive Phakamani Hadebe is the fourth man to act in the position since Molefe’s departure.
Molefe last year made a brief and controversial return to Eskom after the Eskom board comically reinstated him, saying he had not resigned but had retired. But the truth is that Molefe only returned to Eskom because the utility’s plans to give him a R30 million pension payout had become public and Public Enterprises Minister Lynne Brown disagreed with it.
The board then found laughable excuses to return him to his old job.
When the government twisted the Eskom board’s arm to reverse the decision, Molefe took the matter to the Labour Court. Labour union Solidarity also took the matter to the North Gauteng High Court to declare his reinstatement unlawful. This legal challenge was successful and the high court this week ordered Molefe to repay R11 million he received as part of his pension payout.
The new board will also have to deal with recently-reinstated executive Matshela Koko. The Presidency last weekend ordered the board to remove him and former chief financial officer Anoj Singh. The two are heavily implicated in the so-called state capture project. While Singh and acting head of group capital Prish Govender tendered their resignations this week, Koko is digging in his heels, putting the board in an unenviable position.
Finance Minister Malusi Gigaba this week pleaded with Koko and Singh to “do the right thing.” But Koko is having none of it. “I have been working for Eskom for 23 years. My association with Eskom is over 31 years. Eskom took me to high school, took me to university. I have only worked for Eskom. My blood is Eskom blue,” Koko told Public Enterprises Portfolio committee that is probing allegations of corruption, governance failures and mismanagement of state funds at Eskom.
On one hand, there is a clear directive to fire Koko, while at the same time the beleaguered executive was recently cleared of misconduct charges. Unless the two parties reach a mutual agreement, another legal showdown is looming.
Singh and Koko this week appeared before the Parliamentary inquiry where they were quizzed about their close ties with the Gupta family. They were specifically asked why Sahara Computers, a Gupta company, paid for their stay in the luxurious Oberoi Hotel in Dubai. The two have denied any wrongdoing. Koko said his family travelled to Bali in Indonesia via Doha in January 2016 and on his return, he, his wife and son stopped over in Dubai, while his daughters returned to South Africa via Doha.
- BUSINESS REPORT