Eskom turns to former boss

Former executive back because he knows where skeletons are buried, says insider

● Eskom’s search to replenish its decimated senior ranks has led it back to one of its old hands, Paul O’Flaherty, who has the considerable backing of Eskom’s board and is seemingly the frontrunner for the post of chief financial officer.

The beleaguered power utility, which has been attempting a clean-up over the past few months since Cyril Ramaphosa’s election as president, has made significant changes to its senior management and board.

A source close to Eskom said it was highly likely that O’Flaherty would be back at Eskom as he was the only recommendation the board had made to the Minister of Public Enterprises, Pravin Gordhan.

“He knows where the bodies are, that’s part of the reason why he is being recommended,” the source told Business Times.

Gordhan makes all CEO and CFO appointments for state-owned companies.

Last week the minister appointed Phakamani Hadebe as the group’s new permanent CEO.

Hadebe had been acting CEO since the beginning of the year.

O’Flaherty is a former CEO at the country’s biggest steel company, ArcelorMittal South Africa, where he spearheaded the installation of trade barriers to protect South Africa’s steel from cheap Chinese imports. The tariffs have played a significant role in ensuring a sustainable local steel industry.

Prior to his 18-month stint at the steel maker, O’Flaherty worked for Eskom between 2009 and 2013 as financial director. During this time he managed to come up with a funding plan called “Back to Basics”, intended to improve the power operations and systems.

O’Flaherty left Eskom at a time when it was reeling from bad governance and funding irregularities due to the politics of state capture. In the six years since he left, the institution has had seven different CEOs in either utility’s acting or permanent positions.

After he left, Eskom had four chief financial officers, including Anoj Singh, who joined in 2015 and resigned in 2018 after the power utility suspended him because of his alleged involvement with the Gupta family, which is embroiled in state capture.

Although he may be top of the list and the right man for the job, critics say O’Flaherty does not know how to deal with the political pressures that usually come with the job, especially at a state-owned company in which government has a heavy financial involvement.

Some critics also say that dealing with the government during the tariff debates about the struggling steel producer was one of the reasons O’Flaherty left after 18 months on the job.

O’Flaherty, who has also been Group Five CFO, said he would not comment on speculation and was currently working in Dubai.

Hadebe said this week that Eskom had reduced its funding gap to R58-billion after managing to raise R13.16-billion from municipalities.

Eskom requires R72-billion for the 2019 financial period.