DON’T CELEBRATE TOO SOON
The events unfolding at the top levels of Eskom and other parts of the state may have the unfortunate effect of inducing a false sense of accomplishment among those campaigning against corruption and for good corporate governance. The highly regarded Jabu Mabuza has come in to lead a worthy board full of the kind of servant-leader SA has sorely missed over the past nine years; the equally respected Phakamani Hadebe will lead a reconfigured management team.
The fact is we have arrived at this point where we can look back with pride at what has been achieved, but must march forward because the mission to defeat corruption and fraud has only just begun. We have arrived at the point we are, not to rest, but only to take up our anti-corruption arms to fight some more.
Indeed, a lot has been achieved in the past two weeks, starting with the firing of the Eskom board staffed by incompetents led by Zethembe Khoza and appointed by Lynne Brown. This was followed by the immediate dismissal of six senior executives (one is still fighting to retain his place at the feeding trough), the real foot soldiers in the corrupt army of state capture, from Megawatt Park.
Elsewhere in government, bold steps have been taken and, daily, the frontiers of corruption are being challenged. The lieutenants in the army of state capture have been put on the back foot. Here I refer to those who occupy positions of trust in the Union Buildings and in various ministries, meant for the service of the nation. These traitors have been marching to a different beat, commanded by shadowy forces against the people, in defiance of their oath of office.
The new leadership at Eskom is frank in its assessment of the precarious situation in which the utility finds itself. It is full of workable ideas to overcome these. These possible solutions are simple and straightforward. The truth is always simple. The problems are that the utility’s debt pile is unsustainably high at R367bn, and that the costs are far too high. Thus both operating costs and debt ought to be reduced. Soon. It is that simple. This leadership says it will work out models and scenarios for the shareholder — government — to decide on the way forward.
Turn debt into equity
The key would be to convert some of the debt strangling the utility into equity. At the right price, there will be no shortage of buyers. The Public Investment Corp (PIC) could convert its approximately R90bn of debt owed by Eskom into equity, gaining a direct say in who the board and management teams are. Eskom owes the Development Bank of Southern Africa
(DBSA) R15bn.
These institutions are controlled by treasury, and their accepting Eskom equity would inject into the utility the kind of corporate discipline that has sustainably grown the Chinese economy over the past 40 years. In SA, Telkom is a living example of what can be achieved with a little diversifying of the investor base while government remains the anchor shareholder.
This would be achieved without attracting political tensions over the word “privatisation”. Of course, once these shares are in the hands of the PIC and DBSA, it would be easier, in time, to flip them over to other private investors. Jpmorgan, Barclays Africa and Standard Bank are among the largest lenders to Eskom, and would no doubt appreciate a piece of the action.
But I digress. My point here is that the fight against corruption is far from over. It has only just begun.
As Guinea-bissauan revolutionary Amilcar Cabral exhorted his comrades: “Hide nothing from the masses of our people. Tell no lies. Expose lies whenever they are told. Mask no difficulties, mistakes, failures. Claim no easy victories . . .”
My point here is that the fight against corruption is far from over. It has only just begun