How Jabu Mabuza's Eskom era short-circuited the power utility
The cause was construction activities in the late ’80s and early ’90s. The power system was stabilised between August 2015 and February 2018.
Eskom was so confident about the security of electricity supply up to 2021 that it declined to extend eight contracts with short-term independent power producers (IPPs) for an additional 24 months, from April 1, 2016 until March 31, 2018.
The short-term IPPs were supplying Eskom with 807 megawatts. This move saved Eskom R8.16billion and the lights were kept on without the use of emergency diesel generators, but the government was not enthused.
The IPPs’ programme became a problem so controversial and sensitive that it became risky for Eskom executives to deal with. The issue became politicised and contentious.
Consequently, Eskom was caught in the crossfire of the build-up to the ANC’s 54th National Conference in December 2017.
Eskom lenders, the banks, the National Treasury and Business Leadership South Africa, under the leadership of Jabu Mabuza, and Cyril Ramaphosa, who was then ANC deputy president, fought a proxy fight, charging that there was corruption in Eskom in which former president Jacob Zuma, his friends in business and the “captured” Eskom executives conspired to loot Eskom of billions of rand.
In any organisation, policies and procedures that seek to achieve sound corporate governance can be undermined and circumvented by dishonest and corrupt officials. Such conduct also occurs at Eskom and has, unfortunately, occurred at senior levels.
Ramaphosa emerged victorious at the 54th National Conference and within a month he dismissed the Eskom board and appointed Jabu Mabuza as the new chairperson of the utility, with Phakamani Hadebe chosen as the group chief executive.
On March 9, 2018, then minister of energy Jeff Radebe announced that the controversial 27 renewable energy IPPs’ agreements that were meant to have been signed 24 months earlier, would be signed on March 13, 2018, with the full support of the president, the Cabinet and Eskom.
The minister signed the agreements on April 4, 2018, after a failed court bid by the Coal Transporters’ Forum and the National Union of Metalworkers to challenge the minister’s action. This was a display of political interference and had its resultant effect on the business processes of Eskom.
There was a huge hollowing of skills under the leadership of Mabuza. Eighteen of the top senior executives, 16 of them with cumulative Eskom experience of more than 220 years, were forced to leave, either through forced resignations or retrenchments.
The eight retrenched senior executives were aggrieved, and they approached the Commission for Conciliation, Mediation and Arbitration for dispute resolution. Their dispute remains unresolved.
Eskom power stations suffered the worst consequences during Mabuza’s era. The ageing power stations were left without experienced managers. Three general managers and a number of technical specialists were suspended.
Minister Pravin Gordhan announced that “significant malfeasance has been discovered at Eskom, with at least 3000 employees implicated”. He said at least 1000 of those had been dealt with.
Only one of these 3000 high-profile Eskom cases has been brought to court, although there has been pressure to go for the “low hanging fruits” to demonstrate that those involved in graft would be prosecuted.
Advocate Hermione Cronje of the Investigative Directorate told Parliament last month that the problem with “low hanging fruits” was that “we do not get to people we were set up to get”. The people they were set up to get “do not have their hands dirty in the awards of contracts, but are benefiting and orchestrating behind the scenes”.
While Mabuza resigned in January this year after his commitment to no-load shedding was not realised, the bout of load shedding under his watch proved extremely damaging to the economy.
In February, Minister of Mineral Resources and Energy Gwede Mantashe took the first step in the process of procuring 13813MW of new generation capacity from the IPPs up to 2027 by sending two draft section 34 ministerial determinations to the National Energy Regulator of South Africa. Two-thousand megawatts of new generation capacity will be procured between 2019 and 2022, and a further 11813MW between 2022 and 2027.
Under the two section 34 ministerial determinations, Eskom is excluded from building, owning and operating any of the 13 813MW of new generation capacity until 2027.
Meanwhile, the integrated resource plan of 2019 expects Eskom to decommission 12500MW of its generating capacity by 2030.
By 2030, we will experience Eskom Lite, and it will be a shadow of the Eskom of today because the government has given up on Eskom.
* Matshela Koko is a former acting chief executive at Eskom
** The views expressed herein are not necessarily those of Independent Media.