Siseko Njobeni on the changing tides at Eskom
AS ESKOM’s board was put on its head at the weekend in a move to turn the troubled power utility around, all eyes turned to Public Enterprises Minister Lynne Brown, Eskom’s shareholder representative.
When her office released a statement on Sunday night, she told all who cared to listen that she was at the centre of efforts to put Eskom right. She is part of the solution, was the gist of her message. Never mind those who think she is part of the problem.
Brown has become predictable. “Fast-tracking the appointment of Eskom’s new board was necessitated by the company’s precarious liquidity position and the previous board’s perceived prevarication in dealing with executives facing serious allegations of impropriety,” said Brown.
No prizes for guessing who had appointed the evasive board last month.
Brown’s statement on Sunday was weird in a number of respects. She said Eskom’s precarious finances prompted the changes. But Eskom’s financial woes are hardly a revelation. By the time Brown appointed the board last year, Eskom had already publicly confirmed that its liquidity was deteriorating.
In response, in December she made board appointments that incensed key stakeholders, including business. At that time she knew – or should have known – that some of the people she had reappointed into the “new” board had been complicit in the mismanagement and corruption that had engulfed Eskom. She reappointed Zethembe Khoza despite question marks over his role in the rampant rot at Eskom.
With a straight face, Brown said Eskom’s financial circumstances demanded immediate action. That is hard to believe. But it isn’t surprising. As we have seen with previous scandals, Brown rarely takes blame for the Eskom mess. Not even in the face of damning facts. But her latest utterances take the cake. It is a poor attempt to save face.
Putting Brown aside, the changes at Eskom were long overdue. The utility’s problems had just become too big to ignore. The Eskom leadership was facing a palace revolution. A group of Eskom managers last week wrote to Deputy President Cyril Ramaphosa, and copied Brown, calling for a new and credible board. In the letter they laid bare their frustrations with the leadership, and the ethical and financial problems facing Eskom. They called for urgent action. They lamented lack of decisive and bold action against allegations of fraud, corruption and maladministration.
The tide had indeed turned. Except for a handful of brave individuals, the majority of Eskom employees have said little about the state of affairs at the utility. This added weight to rumours that fear had gripped the corridors of Eskom and that senior managers – eager to hold on to their jobs – were scared of their own shadows.
Sweeping problems under the carpet is no longer an option. As the African proverb goes, what has horns must not be hid in a sack. Eskom is racing against time after the JSE threatened to suspend the listing of the utility’s bonds if it failed to release financials for the six months ended September 30.
Investec chief economist Annabel Bishop says the suspension would prevent Eskom from raising debt on the capital markets and crush investor confidence. The new Eskom board is under the stewardship of Jabu Mabuza and Phakamani Hadebe as chairperson and interim chief executive respectively. The new leadership has the mammoth task of shoring up confidence in the financially distressed utility.
As the new Eskom board gets to grips with the magnitude of the problems facing the utility, more skeletons are likely to tumble out of the closet when the portfolio committee on public enterprises resumes its inquiry into the mismanagement of state funds in state-owned enterprises today and tomorrow. The inquiry will hear evidence from suspended Eskom chief financial officer Anoj Singh and former acting chief executive Matshela Koko.