Eskom’s 96-year history is replete with former CEOs who rose from within SA’s debt-laden state utility to run the company.
There are few obvious choices for the next CEO to come from those same ranks.
Two possible candidates from Eskom’s executive team to replace Phakamani Hadebe have strengths but also weaknesses. CFO Calib Cassim is a chartered accountant who has worked at Eskom for 17 years, yet he has little technical expertise. COO Jan Oberholzer, who has held a range of jobs during 25 years at the power utility, may not have the financial experience to steady its shaky finances.
The new CEO will need political clout and connections to navigate Eskom’s complex relationship with the government, which plans to break the utility into three units. The state has also been reticent to give it the money Eskom says it needs to remain solvent, or the go-ahead to fire excess staff.
“Generally, when a company is in a mess, you appoint a CEO from outside,” Jannie Rossouw, head of the University of Witwatersrand’s school of economic and business sciences in Johannesburg, said. Within Eskom, “the cupboard is fairly bare and their choices are indeed very limited’’, he said.
The position will be advertised and there is “nothing to say at this stage”, Eskom said in an e-mailed reply to questions.
A failure to invest in sufficient new capacity and maintenance has left Eskom struggling to supply enough power to Africa’s most industrialised economy, and it is saddled with more than $30bn in debt that it is battling to service.
Hadebe last week announced that he is quitting at the end of July because his health is suffering due to the “unimaginable demands” of the job. He will be the tenth CEO to leave in as many years.
Hadebe, whose previous experience includes managing SA's land bank and helping oversee assets and liabilities at the Treasury, was an external appointment but his three predecessors came from within Eskom’s ranks. Brian Molefe, who served as CEO from mid-2015 to late 2016 was from outside the company but within the wider state structure. He was previously head of Transnet, the state-owned freight rail, ports and pipelines company.
“Somebody inside a company doesn’t normally have the ability to fix it because you know too many people in the organisation,” Rossouw said. “When you come from the outside you just think numbers.”
Eskom’s board said it was committed to ensuring the utility has a stable leadership and it will engage with Hadebe over the next two weeks to ensure there is continuity and a steady transition.
The board is yet to decide what kind of leader it wants for Eskom, and the appointment of a chief restructuring officer is also being discussed between the company and the Treasury, analysts at FirstRand Bank said in a note to clients, following an Eskom investor call.
Bloomberg
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