Eskom chair Mteto Nyati has laid bare the challenges faced by the entity due to the country’s localisation drive, saying the utility was at one point forced to subject its equipment to substandard repairs, just to tick the localisation box.
In a conversation with Ann Bernstein, who heads the Centre for Development and Enterprise (CDE), Nyati said it was a mistake to ignore original equipment manufacturers (OEMs) in favour of local players when servicing the power producer’s complex equipment.
“Our power station managers complained about the localisation policy. It prevented them from contracting the companies that built and designed the equipment: the so-called OEMs,” Nyati said.
“We intervened to permit service agreements that would deliver results and prevent the many earlier instances when ‘serviced’ equipment was returned in worse condition than when it had been sent in.
“As a result, maintenance improved at a much faster rate than had been achieved in the previous three years. Our direct link to the OEMs will help us upskill our workforce so that we can maintain the equipment in-house in future.”
Transnet has also relaxed its procurement regime in an effort to make the company more agile and responsive to urgent needs.
The shift allows Transnet to enter into long-term agreements with OEMs and customers who can step in faster than if they went through traditional procurement routes, saying the move would support the supply, maintenance, upgrading and refurbishment of critical infrastructure, rail network, equipment and components to cover the life cycle of the operations assets that are used for delivery to customers.
Nyati also reflected on the tenure of André de Ruyter at the helm of the entity, saying the group had moved on from painting its employees with the same brush when it comes to corruption allegations.
“The current board has yet to find evidence of mafias in Eskom. Instead, we have found evidence of corrupt individuals linked to external contractors. We have moved away from making generalisations about our staff as useless or corrupt. Painting everybody with the same brush is just wrong. The majority of our employees are honest people,” Nyati said.
“Stemming the tide of corruption is a critical priority for the board. We have established a project management unit in the office of the CEO to drive consequence management and collaborate with agencies such as the SIU and the police in investigating fraud and corruption.
“We have gathered detailed data through artificial intelligence and related technologies to monitor and connect the dots, identify individuals involved in corruption, and create a clearer picture of what is happening,” he said.
Eskom has turned its operational performance around, having kept the lights on for more than 10 months and significantly reducing its expenditure on diesel. It spent more than R50bn over the past five years as it struggled to keep its coal-fired plants running, forcing it to use open-cycle gas turbines to generate energy.
In December, the power producer reported a huge R55bn loss after tax for the year ended March 2024, mainly due to derecognition of a deferred tax asset of R36.6bn, triggered by the separation of the National Transmission Company SA (NTCSA) in March 2024.
Nyati said the improved operational performance by the entity had seen public sentiment shifting towards the utility.
“Business leaders who once invested in self-generation have inquired whether they should continue or whether they should invest elsewhere and revert to relying on Eskom for their power needs. Even some middle-class consumers who invested heavily in backup power solutions are beginning to regret it, now that Eskom has achieved eight consecutive months without load-shedding,” Nyati said.
“Of course, the new board was deeply concerned by the absence of a long-term plan for Eskom to be part of the country’s renewable energy future. The previous strategy seemed to involve a deliberate attempt to ‘hollow out’ the organisation by decommissioning power stations and to let the private sector take over the generation of renewable energy, which would lead to the eventual cessation of Eskom operations.
“As a board, we found this unacceptable. Our responsibility is to ensure Eskom’s continued relevance and growth, and we remain committed to its active participation in the renewable energy sector. Eskom’s skills, existing infrastructure, and the land surrounding our power stations give us a competitive advantage.”
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