‘I cannot fix Eskom. But we can’
Meet the chief executive of Eskom, a father and cook, who wakes at 3am to write speeches. André de Ruyter speaks to about the future of the power utility, balancing its debt and how to make the best bully beef toast
Athandiwe Saba How do you go to sleep at night knowing you are the head of a company that is in half-a-trillion-rand debt?
Falling asleep is not a problem, but waking up at three in the morning is the problem. So generally, I’m exhausted enough to fall asleep. But I tend to wake up in the middle of the night thinking I should have done this and I should have done that.
You’re up at 3am and what do you do besides thinking of the Eskom problems?
I’ve been known to write speeches, emails, all sorts of things. But I also try to get back to sleep desperately. Sometimes I succeed.
I have a little boy and he has spent almost half of his life with power outages. How would you explain this to him and the nation?
I completely get that. In an ideal world, your power utility should be invisible. It should be out of mind. You want to switch on your light, switch on your television and you want to charge devices without giving it a second thought. Eskom has not succeeded in that requirement. We have not lived up to our bargain with the population of South Africa.
Because, without electricity in a modern society, everything gets disrupted, which your son has clearly observed.
However, due to many reasons that have developed over the past decade, we have not maintained and built new plants early enough. The plant we have built is not performing as it should for reasons such as design defects; they’ve been late, overspent [on] and [are] not performing as required. That is why we need capacity to be added — capacity that is environmentally sustainable. We need capacity that is going to be funded, to a very large extent, by the private sector. And it’s for this reason that we’re going through the unbundling exercise.
How do you incentivise the private sector to want to be part of this?
So the way to attract any investor is to offer a return. In the past, we, as a country, offered private investors an excessive return. If you look at the tariffs paid for bids of rounds one and two, they are very high. There is very little risk associated with that investment for the private sector [and it is] guaranteed by the treasury. So as we develop, we need to find a tariff system that allows a private investor to recoup the cost of the investment, but also earn a fair return. And the more competition you have, the greater the market discipline to prevent abuses and ensure that those generators are efficient. If you run an inefficient operation, you will go out of business and that is how it should be in every other business.
Speaking about ‘any other business’, what are your thoughts on listing Eskom on the JSE?
I think it’s not something that we would rule out. But where we are today, given the state of our balance sheet, our bad debt, our revenue stream — because of Nersa’s [the National Electricity Regulator of South Africa] tariff decisions — [is] insufficient to cover our reasonable efficient costs. It will be a difficult proposition to list the business with that constellation of facts in its prospectus. I can’t see investors running to buy shares in a business characterised by these negative aspects. The first task that we have to face up to is to restore operational stability [and] make sure that we’ve got an income statement and a balance sheet that is far more robust and resilient than they are today. Then we can think about opportunities of attracting private capital into Eskom.
Do you think you can solve our energy crisis — or anybody else? Does South Africa have a future?
What I always tell Eskom people is that I cannot fix Eskom. But we can fix this. And I think that applies to the South African electricity problem. There is no single person or a single entity that can resolve the challenge of the South African energy crisis. But working together, we have a unique opportunity to pivot from our reliance on fossil fuels [and] coal; in particular, to have a cleaner, greener form of energy generation. If we play our cards right, we [can] have an aligned fiscal, environmental, industrial and energy policy. I believe we could use this opportunity to decarbonise our environment, resolve the energy crisis and create employment.
Let’s take a step away from your work life. What is satisfying about being a father to three kids? And how do you spend time with them?
Fortunately, we’ve got a very active chat group, so we all keep in touch with one another. Two of them are at university. The other one is taking a gap year. What I find very satisfying is just engaging with their critical minds. They are obviously not impressed with their father being the chief executive of Eskom. So they keep me very grounded in a good way.
What were you like when they were growing up? What was your favourite time with them?
My favourite time was reading bedtime stories of all the books that I enjoyed growing up. So sort of revisiting some of the best experiences of my childhood, and taking them to museums and things like that.
How was growing up in Pretoria?
I was born in Pretoria, but I grew up in a town called Bronkhorstspruit. It was a small-town existence. I went to school barefoot and cycled everywhere. There was a lot of carefree time to enjoy healthy outdoor activities. I was privileged to go to government school there. So my father was a very staunch Calvinist; [he] worked very hard and taught me an enormous amount about the love of reading. There were always a lot of books at home. He was a very responsible and caring father.
Looking back, he wasn’t a sportsman at all. He wasn’t interested, but he would always make time to come and stand next to the rugby field on a Saturday to watch me play. I think he must have thought it was a waste of time, but he did it as a loyal father.
My mother was a nurse. She’s now retired. She created a wonderful home with lots of love and lots of good cooking. It was a very, very ordinary upbringing. We weren’t wealthy at all, but I never realised it because it was just a stable home environment, which I was very privileged to have.
One last question. Do you have two left feet? And can you cook? Well, two questions.
[Laughs] Let me qualify my answer there. The saying is that white men can’t jump and can’t dance. Right. So I think I qualify on both of those accounts. I probably will embarrass my children. But I can dance at weddings. So that’s about the extent of it.
Then cooking. I think that I have been able to teach my son the joys of bachelor food. Pasta and mince. How to open a tin of bully beef and mix it with a tin of onions, tomatoes and put it on toast.