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 Age (Western Cape) - - Politics - DEN­NIS CRUYWAGEN news@the­newage.co.za

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?”

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