Energy expert and fundi of all things Eskom-related, Chris Yelland, said on Sunday that it could even take up to a decade before the state power utility is out of the red.
Yelland welcomed the presidential announcement of a new 13-member board and a remedial plan of action to stabilise management at Eskom.
“This is the first time that we are seeing credible people with a long reputation of serving South Africa on Eskom’s board.
“I am talking about people like Nelisiwe Magubane, Rod Crompton, and so on,” Yelland said.
But Yelland said it would be a mistake to think that a new board would be a quick fix for the ailing SOE.
“The job has not yet started. We have not yet stepped back from the brink.
“The fact that we have a new board is a positive sign but now there needs to be short, medium and long-term strategies and plans to draw up,” he said. He applauded the appointment of Telkom board chairperson Jabu Mabuza as chairperson of the new Eskom board with Phakamani Hadebe as the acting group chief executive.
Yelland credited Mabuza for the strong turnaround that Telkom had made in the recent years.
“Eskom’s business model is currently not fit to the purpose. It needs to increase sales and decrease costs. It also needs to increase public participation and list the parastatal on the stock exchange and have the public invest in Eskom as stakeholder.
“He (Mabuza) did exactly this at Telkom, which also used to be a state-owned enterprise. It surely cannot be done overnight and could even take 10 years but if we don’t start now, we will never achieve it,” Yelland said.
Announcing the new board on Saturday, the Presidency said it believed the appointments would restore confidence in the parastatal, improve its financial position and restore its operational performance.
The announcement came after Cyril Ramaphosa, as chair of the Inter-Ministerial Committee on SOE Reform, held a high-level meeting on Friday with President Jacob Zuma, Finance Minister Malusi Gigaba and Public Enterprises Minister Lynne Brown.
Ramaphosa said the new board would help restore Eskom as an important contributor to the economy.
“Eskom is critical to the South African economy. As a key enabler of economic growth and social transformation, any further deterioration of Eskom’s financial and operational conditions could have a severe impact on the country,” a statement read.
The company has faced several challenges, including allegations linked to state capture, a weak financial position, declining revenues and governance failures.
The board was further directed to appoint a permanent Group Chief Executive and Group Chief Financial Officer within the next three months and immediately remove all Eskom executives who are facing allegations of serious corruption and other acts of impropriety, including executives Matshela Koko and Anoj Singh.
CEO of Business Leadership SA (BLSA), Bonang Mohale, said the appointment of the new board demonstrated “credible plans and determination” to address the governance crisis facing the utility.
“ and (the appointment of the new board) presents an opportunity to show South Africans and the investor community full commitment to restoring Eskom to financial stability which, if achieved, will shore up the fiscal position of the state as a whole.”
Last week, a senior employee of global credit rating agency Standard & Poor’s (S&P) said he was “very concerned” about the liquidity situation at Eskom and that the parastatal faced a debt default.
S&P downgraded the power utility’s long-term credit rating last November.
A month after the S&P downgrade, the Helen Suzman Foundation filed court papers to sue President Jacob Zuma, the Gupta brothers and others for billions of rand that were allegedly unlawfully paid to the Gupta family’s businesses by Eskom.
The foundation, along with Sygnia CEO Magda Wierzycka filed the papers at the Pretoria High Court.
The respondents in the matter included Finance Minister Malusi Gigaba and the National Treasury, among others, and it emerged on Sunday that both Gigaba and the Treasury had since filed notice of their support of the application.
The South African Federation of Trade Unions (Saftu) also welcomed the new board, saying they had a “colossal task” to rescue Eskom from “bankruptcy and implosion, which would have potentially catastrophic consequences for consumers, workers and economic activity as a whole”.
The DA’s Natasha Mazzone said the appointment of the new board did not mean that the indiscretions of their predecessors should be forgotten.
“All those responsible for the decline at Eskom must be held accountable,” she said.
New Eskom board
1. Jabu Mabuza as chairperson
2. Sifiso Dabengwa
3. Sindi Mabaso-Koyana
4. Mark Lamberti
5. Professor Tshepo Mongalo
6. Professor Malegapuru Makgoba
7. Busisiwe Mavuso
8. Nelisiwe Magubane
9. Dr Rod Crompton
10. George Sebulela
11. Dr Pulane Molokwane
12. Dr Banothile Makhubela
13. Jacky Molisane