Eskom furious over attacks on its executives
Johannesburg - The board of Eskom has denied allegations of power abuse and procurement irregularities levelled against the power utility’s executive management including chief executive André de Ruyter.
The board described the allegations, which have been flooding the media and the public since last week, as being geared to influence internal operational and good governance processes by exerting pressure from external structures.
This came after the Standing Committee on Public Accounts resolved on Wednesday to probe allegations levelled against De Ruyter by suspended chief procurement officer Solly Tshitangano.
The parliamentarians cancelled their hearing into Eskom’s 2019-20 annual report, with deviations and expansion of contracts made to National Treasury at the centre of the probe.
Yesterday, spokesperson Sikhonathi Mantshantsha said the entity was prepared to make a presentation to Scopa, but suspended the proceedings in order to consider the allegations made by Tshitangano.
“Eskom remains ready and available to account to Parliament as required by law,” he said.
Mantshantsha said the allegations and attacks on management have the potential effect of distracting management from the critical role of restoring Eskom to operational effectiveness and financial stability.
“This is unfortunate as Eskom is a critical and strategic asset of South Africa, on which the fortunes of the whole country and economy depend,” he said.
Mantshantsha also said the board was confident that management was executing its mandate to restructure the business, reduce the risk of load shedding and drive greater efficiency through cost savings, including from existing and new procurement contracts.
“The board will continue to support and guide management in these efforts,” he said.
Mantshantsha also said the board had affirmed its support and confidence in the executive management to instil a high performance culture, including the application of appropriate consequence management in accordance with Eskom’s internal disciplinary processes.
“The board has complete faith in the company’s internal processes and governance procedures to deliver a fair process and outcome on the matter of the suspended chief procurement officer,” he said.
The executive management, Mantshantsha said, remained fully accountable to the board.
“The board is confident that the management team is currently performing its critically important duties to restore Eskom to operational stability and a sustainable financial position.”
This was despite procurement having long been an area of particular concern to the board of Eskom, with expected savings failing to materialise.
“The board has therefore encouraged and instructed the executive management of Eskom, including the Group Chief Executive, André de Ruyter, to pay particular attention to the procurement function to effect the required change, and deliver the expected savings.
“Progress in this regard has been slower than the board would have liked to see, at least in part, due to leadership lacunae in the procurement function,” Mantshantsha said.
Meanwhile, the National Union of Mineworkers (NUM) said it was highly disturbed by the allegations of racism levelled against De Ruyter, along with other managers, for purging black suppliers.
Tshitangano had alleged that De Ruyter preferred white-owned companies over black-owned companies, among other things.
NUM acting general secretary William Mabapa said the allegations were serious ones.
“The NUM stands firm in its support of Parliament’s Scopa to probe the allegations against De Ruyter,” Mabapa said.
He called on Public Enterprise Minister Pravin Gordhan to take action.
“Whenever racism shows its ugly head it must be dealt with and defeated,” Mabapa said.
He also said the union noted reports suggesting that Eskom required R1 billion a week for its survival.
“The problems of Eskom cannot be resolved by only injecting money.”
Mabapa said the government should review the evergreen coal contracts and the independent power producer’s contracts that were milking the entity.
Eskom should, among other things, bring back the cost-plus mines to its books.
“This will allow Eskom to reduce the unnecessary cost of coal,” Mabapa added.