There is an irresistibly powerful and compelling historical background to understanding the roots of the apparently interminable Eskom crisis, which has had devastating consequences for our society, especially the poor in townships and rural areas who do not have generators to switch on and the resources to run and maintain them when there is load-shedding.
It is as a result of this background that Busi Mavuso, a nonexecutive director on the board of Eskom, could assert recently in a briefing to parliament’s standing committee on public accounts (Scopa) that it is the ruling ANC government that is primarily responsible for the recurring crises at Eskom. This assertion was based on load-shedding beginning for the first time in Eskom’s history in 2008, against a particular background in which numerous calls were made for the ANC to build new electricity generation capacity to cope with steadily increasing demand in the late 1990s and early 2000s, but to no avail.
Mavuso was certainly right when she insisted that the Eskom board cannot be the “fall guy” for the “mess at Eskom” and that it is the ANC which bears the biggest responsibility for it. But before demonstrating why she is right in her assessment I need to excavate the new power relations governing electricity supply after the watershed 1994 elections upon which she made that bold, courageous and unprecedented assertion in public by an Eskom board member.
For this purpose I need to provide a bit of history of Eskom. I have often wondered whether the ANC has studied the history of Eskom from its birth in 1922 and especially what happened to it after it took office in 1994. After all, there are instructive lessons for electricity generation, distribution and supply in that history.
Since Eskom was formed in 1922 it operated as a “creature of statute” or public corporation, though given the history of racism in SA it primarily served the interests of white people in general and white Afrikaners in particular. Eskom’s mandate was simply to establish, maintain and provide an efficient supply of electricity at the lowest possible cost. Eskom was the pride of Afrikaner nationalism, especially since the National Party came to power in 1948, as a result of the vital role it played as a regular, efficient and reliable supplier of electricity to the economy and society.
So important was maintaining its public corporation profile to best serve its interests that even with The Eskom Act of 1987 it remained a creature of statute. The act differentiated between Eskom and the state in terms of its executive and administrative powers, with a governance structure that emphasised its independence from state control to best serve its public mandate. In a nutshell, that is how Eskom was run during the apartheid years, until a 1998 amendment to that legislation converted it from an independent public corporation into a state-owned enterprise (SOE).
To complete this process in 2001 Eskom was registered as a public company in terms of the Companies Act. Its first board was appointed by the ANC. But experience shows that this was less a conversion to a truly public company and much more to a state company, hence it was called an SOE. The problem, however, is what happened at Eskom after this conversion. Corruption in Eskom grew much worse and the problems of incompetence more glaring.
By converting Eskom from a public corporation into a state-owned enterprise, the ANC became its sole shareholder and a partisan player in the distribution of patronage...
This legislative transition to an SOE was instrumentalised by the ANC’s cadre deployment policy. In other words, soon after Eskom became an SOE and was registered as a non-independent public company it opened the floodgates of corruption and cronyism that went inexorably with it and out of which was woven the state capture shenanigans and its devastating consequences which we have been inundated with, as was seen in the Zondo commission of inquiry and the Special Investigation Unit’s reports of this year. Indeed, by changing Eskom into an SOE and becoming its sole shareholder, the ANC became a partisan player, notably in the distribution of patronage to its cadres deployed across the state and public sectors.
In the 1990s various people, including experts in the field, expressed concern over Eskom’s change from a public corporation to an SOE, probably partly to avoid both the consequences of the ANC’s cadre deployment policy and the corruption that turned out to be endemic to it. In this regard, the Zondo commission is assured of an illustrious place in our history as a result of what it has achieved since it began its work in 2018. Nowhere and nothing before exposed how SOEs were turned into sites of fetid ANC corruption more than the state capture inquiry, and especially how this was much more evident at Eskom than at any other SOE.
One of the experts, former Eskom executive Wessel Swart, addressed parliament in 1997 about the dangers of changing Eskom from a public corporation into an SOE. He was emphatic that this was the heart of the problem after the ANC took office in 1994. Writing in 1997 to then CEO of Eskom Allen Morgan, he said: “I am critical of Eskom’s leaders and the management board for so easily accepting that Eskom is a state organ and in the process being the servants of the minister.”
Reminding Morgan of Act 40 of 1987 (The Eskom Act) Swart continued: “This act differentiates between Eskom and the state or a state organ with the Electricity Council having executive and administrative powers and the Council need only confer with the minister on policy and in the national interest.” He reminded Morgan that the act pledged itself, as Eskom has since its inception in 1902, to the “lowest cost of electricity for growth and prosperity for all in the national interest”. Finally, he advised Morgan to “keep the government out of Eskom’s engine room”.
But back to Mavuso’s attack on the ANC for the chronic and damaging load-shedding crisis. A recurring theme in all Eskom debates since load-shedding began in 2008 has been the repeated failure or refusal by the ANC to substantially increase Eskom’s generation capacity. This was the main underlying reason for load-shedding and hence for Mavuso’s attack on the ANC. In this regard, there is an abundance of irrefutable evidence to support her charge.
In fact, the ANC failed or refused to build new power stations, even when many calls were made to do so, including by experts in the late 1990s and early 2000s. Even the 1998 white paper on energy policy said that new and increased capacity had to be created by 2007 at the latest, based on projections of demand by Eskom and energy experts. As we well know, by 2007 this had not happened. The result was the start of load-shedding in January 2008.
On the other hand, under apartheid, despite its overtly racist policies, Eskom diligently built new power stations when these were required and did so on time, on budget and with cheap debt, which was underwritten by the state. Eskom was then largely a technocracy, controlled by engineers and technicians, but actively supported by the apartheid state because of the vital importance of an adequate and reliable supply of electricity to the economy.
There are some telling and, indeed, sinister indicators of the performance of Eskom after it had become an SOE in 1998 and lapsed into recurring and chronic operational crisis.
Eskom is the starkest manifestation of the failures of ANC rule in postapartheid SA and this will be the verdict of future historians.
The shenanigans at Eskom have gone on with impunity for too long, but fortunately, as a result of the strong reactions of the opposition in parliament and of the wider public to the recent drastic stage four load-shedding and the acrimonious clash between Mavuso and Scopa it seems we might finally be heading towards some conclusions that hold promise for a longer-lasting and effective solution to the perennial crisis at Eskom, the most publicly reviled SOE in postapartheid SA.
However, the first thing to be said upfront is that in every conceivable respect the ANC misled South Africans and/or were terribly naive when in 1992 it released the document, “Ready to Govern”. I argue that though many other SOEs have also been disasters and were also wrecked by corruption, no other SOE demonstrates the unmitigated failures of the ANC to govern more than Eskom.
It is the starkest manifestation of the failures of ANC rule in postapartheid SA and I am certain that this will be the verdict of future historians, if they abide by the facts of what has happened generally to all SOEs after 1994 but particularly to Eskom. In no SOE have we seen a more spectacular and sinister combination of incompetence and corruption, than we have seen at Eskom since load-shedding began in 2008.
When corruption and incompetence combine, as it has in Eskom, we are reminded of the ANC’s bankrupt and self-serving cadre deployment policy. In this regard, besides the results of scholarly research, reports from newspapers alone have abundantly shown the poor quality of leadership at Eskom over many years. For example, maintenance failures at power plants have often been due to poor workmanship attributable to human error and lack of skills.
With regard to glaring incompetence at Eskom, many skilled white technicians and electricians were driven out. In 2014 Dirk Hermann, leader of Solidarity, spoke of the thousands of skilled white employees who left Eskom after it became an SOE and the implementation of affirmative action policies. In this regard, he said it was not that those who left were white but that they possessed technical and managerial skills that were lost to Eskom. A few months ago CEO André de Ruyter and COO Jan Oberholzer said Eskom lacks certain skills which have also played a role in its operational problems.
Despite the flurry of opportunistic condemnation of the top leaders of Eskom, especially De Ruyter, they are relatively the best executive leadership to date that Eskom has had, but who inherited enormous problems which go back to the 1990s and early 2000s. Those who heavily criticise De Ruyter have failed or refused to recognise the immense difficulties he inherited at Eskom, in which incompetence has been combined with blatant corruption over many years, taking a high toll on the utility in many respects.
A few months ago, De Ruyter also produced evidence of sabotage at the Lethabo power station in the Free State. There have been media reports of similar sabotage elsewhere in Eskom, especially by News 24’s “The Eskom Files”. There must be no doubt that much, if not all, these acts of sabotage are not only intentional, conscious and premeditated, but calculated to reflect adversely on De Ruyter’s leadership. This I believe was orchestrated by black Africanist elements in Eskom who have benefited from corruption over the years and saw him as the biggest threat to its continuation.
But what did ANC cadres deployed to Eskom achieve while they were in the executive leadership? Brian Molefe, former CEO, resigned after being exposed by the public protector’s report on state capture. The Zondo commission found evidence of corruption on his part and has suggested that he face prosecution. Similarly, after the distasteful management style of former CEO Matshela Koko became widely known at Eskom, many senior managers signed a letter of complaint to President Cyril Ramaphosa, after which Koko also resigned.
The commission found compelling evidence that both Molefe and Koko, like Lynne Brown, former minister of public enterprises, were in cahoots with the Guptas who had spun a web of corruption at Eskom. It also showed that Tegeta, the company owned by the Guptas, was at the centre of much of the corruption at Eskom it had unearthed. No wonder Tegeta was already placed in business rescue in April 2018, after it failed to provide Eskom with coal as it was contracted to.
The latest Zondo commission report also found that former president Jacob Zuma was instrumental in facilitating these and other acts of corruption inside Eskom. It shows indisputable evidence of what was all along suspected and which the media made abundantly clear: Zuma was central to facilitating the capture of Eskom by the Guptas. The report produced compelling evidence that Zuma kept tight control on ensuring that relevant ministers did what the Guptas expected.
All the former Eskom executives deployed by the ANC who appeared before the commission were shown to have been involved and complicit, to varying degrees, in corruption and fraud in Eskom over many years. While the ANC placed its notoriously corrupt cadres in Eskom at various levels, supplier costs were corruptly inflated, maintenance was neglected (probably so that there was more money to plunder) and quality control hardly took place, all of which are essential at an electricity utility, especially one as big as Eskom is.
Besides, the crises at Eskom were also responsible for several debilitating economic downgrades by ratings agencies and the enormous sums of public money allocated by the ANC government to rescue it from several crises. And while the ANC’s cadres enriched themselves through corruption at Eskom and other SOEs over many years the black masses who supported them at the polls were plunged into greater poverty, unemployment and social inequalities.
Under the false rubric of a “developmental state” the cadres the ANC deployed to Eskom and other SOEs plundered enormous public resources. The commission has conclusively shown how the ANC abused its access to state power and its enormous resources not to change the lives of the impoverished black masses but to enrich themselves. No wonder chief justice Raymond Zondo, referring to Eskom, said, “The ANC and the ANC government should be ashamed that this has happened under their watch.’’
There can be no doubt that the accusation Mavuso levelled at the ANC was influenced by the fact that as load-shedding and its negative consequences became more graphically evident over the past year the ANC tended to lay the blame disproportionately on the Eskom board, with scant regard to its own role in the woes of Eskom and the worst electricity crisis in our history.
Terrible as apartheid was, we never suffered load-shedding once during the 46-year rule of the National Party, but that is also because it never really interfered with the running of Eskom and certainly did not deploy unqualified and unsuitable cadres of the party to it. And because Eskom’s employees were skilled and professional engineers, electricians and technicians, who were also dedicated civil servants of a public corporation, they were left to do their work, which is probably why Eskom was in 2001 voted the best electricity utility in the world.
• Dr Ebrahim Harvey is an independent political writer, analyst and author of “The Great Pretenders: Race and Class under ANC Rule”, published by Jacana in May 2021.
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