WHO WILL TAKE

CityPress - - Business and Tenders - DEWALD VAN RENSBURG dewald.vrens­burg@city­press.co.za

Eskom’s next CEO is likely to be an­other out­side ap­point­ment be­cause the most ob­vi­ous suc­ces­sor runs the risk of invit­ing more scan­dals. The util­ity’s out­spo­ken head of gen­er­a­tion, Mat­shela Koko, has been flagged as a nat­u­ral choice, which would see Eskom re­sume a tra­di­tion of in­ter­nal pro­mo­tion to the top.

He and out­go­ing CEO Brian Molefe have pre­sented a com­mon front in their in­creas­ingly vo­cif­er­ous ar­gu­ments against Eskom’s obli­ga­tion to buy re­new­able en­ergy from pri­vate pro­duc­ers.

Molefe an­nounced his res­ig­na­tion late last week af­ter the re­lease of for­mer pub­lic pro­tec­tor Thuli Madon­sela’s State of Cap­ture re­port.

Molefe’s al­leged in­ter­ven­tions to favour the Gupta fam­ily’s coal busi­ness, along with his ap­par­ently close re­la­tion­ship to Ajay Gupta, left a cloud hang­ing over his head, de­spite the re­port mak­ing no de­fin­i­tive find­ings. He for­mally steps down at the end of the year. How­ever, Eskom watcher and in­ves­tiga­tive editor at EE Pub­lish­ers Chris Yel­land says that Koko is un­likely to re­place Molefe, ex­cept per­haps as an in­terim CEO.

“[Koko] heads gen­er­a­tion, which is by far the big­gest di­vi­sion. He would be a nat­u­ral fit un­der nor­mal cir­cum­stances,” said Yel­land.

Pro­mot­ing Koko would, how­ever, be risky be­cause he could face le­gal trou­ble on two fronts in the near fu­ture, said Yel­land.

On the one hand, he might be im­pli­cated in wrong­do­ing in the coal con­tracts given to the Gupta fam­ily’s coal min­ing com­pany, Tegeta, when the ju­di­cial in­quiry gets off the ground.

On the other, he could soon face an ad­verse Con­sti­tu­tional Court rul­ing on Eskom’s award­ing of a con­tract at the Koe­berg nu­clear power sta­tion to French ven­dor Areva.

Ri­val West­ing­house took that con­tract award to court and Eskom took it to the Con­sti­tu­tional Court.

If the high­est court in the coun­try found Eskom did wrong, the blame would fall squarely on Koko, said Yel­land.

Eskom and its gov­ern­ment share­holder rep­re­sen­ta­tive, Pub­lic En­ter­prises Min­is­ter Lynne Brown, would prob­a­bly want to avoid the risk of an­other CEO fac­ing a pub­lic in­ves­ti­ga­tion, he said.

“It is un­likely that the CEO will be from the Eskom board or the ex­ec­u­tive com­mit­tee.”

Thava Goven­der, cur­rently head of trans­mis­sion, is an­other can­di­date with the req­ui­site ex­pe­ri­ence who would ear­lier have been on track to the top.

He was head of gen­er­a­tion be­fore Koko, but “in ef­fect got de­moted” to a les­sor po­si­tion af­ter hav­ing presided over a pe­riod of dis­as­trous load shed­ding, said Yel­land.

Molefe and Koko had en­cour­aged a pub­lic nar­ra­tive where they saved Eskom from ruin and South Africa from power short­ages, said Yel­land.

In this nar­ra­tive, Goven­der was one of the vil­lains of the piece, he said.

Brenda Martin, newly ap­pointed CEO of the SA Wind En­ergy As­so­ci­a­tion (Sawea), would not haz­ard a guess about who will lead Eskom.

Sawea is locked in a bat­tle with the power monopoly about its an­tipa­thy to­wards con­nect­ing any more projects un­der the Re­new­able En­ergy In­de­pen­dent Power Pro­ducer Pro­cure­ment (REIPPP) pro­gramme.

“You would like to think that the lead­er­ship does not have that mas­sive an im­pact on long-term in­vest­ment de­ci­sions, but we have seen that they are quite in­flu­en­tial,” Martin told City Press.

Molefe and Koko, in par­tic­u­lar, have forced the REIPPP to a halt by sim­ply re­fus­ing to sign off on oth­er­wise “shovel-ready” projects. They com­plained that the projects were too ex­pen­sive and did not pro­vide re­li­able base load en­ergy.

Eskom has put on hold more than 30 power pur­chase agree­ments with re­new­able in­de­pen­dent power pro­duc­ers, which in essence means it has in­ter­vened in the en­ergy pol­icy im­posed on it by the gov­ern­ment.

“I don’t think you want some­one who will dis­re­gard min­is­te­rial de­ter­mi­na­tions or a CEO that will flout the law and be afraid of en­ergy di­ver­si­fi­ca­tion,” said Martin.

The way the REIPPP works is that pre­ferred bid­ders are se­lected in win­dows. They then sign a 20-year power pur­chase agree­ment with Eskom.

Projects had been stalled by Eskom sim­ply not sign­ing off on quo­ta­tions from the pre­ferred bid­ders, said Martin.

Projects an­nounced as pre­ferred bid­ders in March and Au­gust 2014 are still not signed off, even though the en­tire process for ear­lier bid­ding rounds took only a year.

A lobby group rep­re­sent­ing Eskom’s ma­jor cus­tomers, the En­ergy In­ten­sive Users’ Group, says it barely mat­ters.

“It’s not even some­thing we are con­cerned about. Our con­cern is with the en­ergy com­ing out. Who drives Eskom is a small part of that,” said spokesper­son Shaun Nel.

“The is­sue is the en­ergy plan go­ing ahead and what that will do to pric­ing.”

TRA­DI­TION

Molefe had been the third Eskom CEO parachuted in from the out­side. Up to the res­ig­na­tion of Brian Dames in 2014, Eskom CEOs tended to be long­time Eskom staffers who worked their way up the lad­der.

Dames spent 26 years at Eskom and, like Koko to­day, was head of gen­er­a­tion be­fore be­com­ing CEO in 2010.

Be­fore Dames, Ja­cob Maroga served two and a half years as CEO fol­low­ing more than a decade else­where in the com­pany.

Thu­lani Gcabashe, Eskom CEO from 2000 up to 2007, had like­wise been an in­sider. So was Allen Morgan, CEO from 1994 to 2000 and Eskom’s first CEO af­ter it got turned into a cor­po­ra­tion.

From 2014 on­wards, how­ever, Eskom had a pub­lic en­ter­prises di­rec­tor-gen­eral, Tshediso Ma­tona, a Nersa chair, Collin Matjila, and a “sec­onded” Transnet CEO Molefe put in charge.

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