Marokane’s list of challenges is formidable

Business school textbooks often talk of how important it is for an executive to be good at managing up, not just managing down. This could hardly be more relevant than for Eskom CEO designate Dan Marokane.

His success will depend on whether he can rely on the support of his board and, crucially, of the government. Marokane had better know how difficult SA’s most difficult but most vital CEO job is going to be: he will be the 15th in just more than 15 years and should at least know the perils of the politics he is likely to face.

Marokane joined Eskom in 2010 from PetroSA and led the commercial and new-build divisions before he was suspended in 2015 — at the behest of the Guptas. The Zondo commission said it was “the crucial step to pave the way for the capture of Eskom”.

But Marokane must surely know Eskom’s crisis is due to poisonous politics, not just state capture. On the one hand, a host of vested interests preys on Eskom and stands in the way of necessary reforms. On the other, SA’s political leaders fight among themselves about the present and the future of the power sector and Eskom is caught in the crossfire. Add to that Eskom’s shareholder minister Pravin Gordhan’s well-known meddling, and a somewhat bizarre appointment process, and you have to wonder why Marokane has accepted such a poisoned chalice.

SA should be heartened that he has. Where some of the previous Eskom CEOs had little if any experience of managing large complex organisations, Marokane, a chemical engineer, is hardcore. He has worked in both the public and private sectors and can claim some turnaround expertise gained in his six years at beleaguered Tongaat, where he ended up as acting CEO.

He will need all his skills and experience to tackle the formidable challenges he will face as Eskom’s CEO. Chief of those is keeping the lights on for SA. This is far from simple. Eskom’s power stations are in poor shape and many have been poorly managed. Its skills base has been hollowed out. Its procurement of essential inputs is complicated by corruption, and excessive red tape. Eskom has little control over the pace at which new generation goes on to the grid — it is in the government’s hands.

Another challenge is restoring Eskom’s financial health. It helps that the government is to take on R254bn of its debt, but he will need to ensure Eskom meets the Treasury’s conditions. That includes cutting costs and lifting its revenues.

He will have to do all this while restructuring Eskom as envisaged in the government’s industry road map — which it has been tardy to implement itself. A Transmission Company is being set up, but this needs to be speeded it up so that it can operate and invest in new transmission capacity for more renewable energy.

The list of challenges is long and we wish Marokane the very best of luck. SA needs him to succeed.