New Eskom board in the wings
The message to the boards of all SOEs is that they must shape up or ship out, warns Public Enterprises Minister Lynne Brown
THE new Eskom board that was appointed a fortnight ago will be presented and introduced to the executive at the first Cabinet lekgotla of the year starting today.
This was disclosed in Parliament yesterday at a meeting of the public enterprises portfolio committee by Public Enterprises Minister Lynne Brown.
Some chairpersons and senior executives of stateowned entities that report to Brown accompanied her to the committee meeting.
Brown also told the meeting of the government’s new tough line with stateowned entities.
“The message to the boards of all stateowned entities is that they must shape up or ship out. If they are unable to instil confidence in their management and oversight responsibilities they will be rotated.”
Brown also informed the portfolio committee that a proclamation for the special investigating unit to investigate contract management and procurement at Eskom and Transnet was with President Jacob Zuma awaiting his authorisation.
“This investigation will tie up loose ends left behind by a series of investigations commissioned by Eskom boards, provide the present administration with critical knowledge to empower procurement reform and further propel confidence in the company,” Brown said.
Asked about the recent appointments of the Eskom board, Brown said her department had been engaged in soliciting names of possible members for a new board from business.
A list of names was presented at a meeting held earlier this month. President Zuma, Deputy President Cyril Ramaphosa, Finance Minister Malusi Gigaba and Brown were present.
“We had that list of people. Largely the names came from the list. Off course one or two names came from those in the government who were in the room.”
As the shareholder representative she had to verify the qualifications of board members. She also checked if they had criminal records.
“I do all of that and I take it to Cabinet,” Brown said.
Ratings agency Moody’s, Brown said, had in spite of the new board, downgraded Eskom.
It cited Eskom’s deteriorating liquidity position and the “ability” of the government to provide direct equity support as reasons for its decision.
“That’s the reality of the environment we’re in. We remain resolute in our endeavours to turn the company around and Eskom is already seeing investors and lenders reviving their engagements and commitments to the company.”
Brown said she was relieved that the judicial commission into alleged impropriety at stateowned companies was coming to fruition, while law enforcement agencies appeared to be making progress with their investigations as well.
“As I said many times last year, the only way to get to the bottom of the swirl of allegations of malfeasance and to restore public and investor confidence in our SOEs, is to investigate them.”
The portfolio committee heard that arms manufacturer Denel, which had experienced cash flow challenges towards the end of 2017, has enough money to continue to paying salaries.
Brown also told the committee that the SA Express airline was in a “huge” crisis.
Asked if it was still a going concern, Brown said the company was leasing aircraft when it should be buying 50seater planes.
“But they don’t have the money. I am not too worried at this stage about the urgency of appointing an executive because what if we say it must not exist, that it must be folded into SAA?”