The government is negotiating with newly appointed Eskom CEO André de Ruyter to start his job earlier than planned as it battles to resuscitate the ailing power utility.
Eskom — which supplies virtually all SA’s power and is hamstrung by staggering debt, maintenance issues and design flaws at its new coal power stations Medupi and Kusile — had to resort to stage six load-shedding last week as a result of a shortage of capacity.
Rating agencies have have identified the state power utility as the single largest risk to the economy.
Eskom has been without a permanent CEO since the end of July, when Phakamani Hadebe resigned after just more than a year on the job, saying it had taken a toll on his health.
De Ruyter’s appointment was announced in November and he was due to report for duty on January 15. He is currently the CEO of packaging group Nampak. The company announced in a Sens notice issued in November that De Ruyter’s resignation as CEO and executive director will take effect on January 15.
In a post-cabinet briefing on Tuesday, minister in the presidency Jackson Mthembu said the cabinet had mandated public enterprises minister Pravin Gordhan to negotiate with De Ruyter to commence his duties earlier than the set date.
“Mr De Ruyter, together with his management team, will immediately deal with the concerning issues of governance, lack of financial management as well as stabilise the operations of Eskom. This includes dealing with the huge backlog of maintenance of the aging fleet of power stations and the structural defects at Medupi and Kusile power stations,” Mthembu said.
Eskom unbundling
Apart from the immediate financial and operational crises, De Ruyter’s task will be to oversee the division of Eskom into three separate functions and parts — generation, transmission and distribution — as outlined in the road map for Eskom’s sustainability tabled by the government in October.
The government believes greater transparency and accountability will also help Eskom take the first step towards becoming a competitive electricity company by setting up an independent transmission company, which owns and manages the national grid.
Mthembu said deputy president David Mabuza will convene a resuscitated “energy war room” comprising finance minister Tito Mboweni; mineral resources and energy minister Gwede Mantashe; and Gordhan.
“The team will deal with any challenges to our energy supply in the country,” Mthembu said. He emphasised that renewables will play a key role in SA’s energy supply to complement the efforts of Eskom.
The power utility’s recent problems mirror the crises engulfing most state-owned entities (SOEs). SAA, the struggling national carrier, was placed under business rescue earlier in December.
Mthembu said the cabinet is confident that the intervention at SAA will assist in “repositioning the national airline into a stronger, competitive entity that, with time, will gain the confidence of all South Africans and attract equity partners.”
“The cabinet is confident that this intervention will restore the reputation of the airline and prevent the collapse that would have had a negative impact on passengers, suppliers and other partners in the aviation sector and importantly, the workforce,” Mthembu said.
He said that SAA will receive an additional R2bn in financial assistance from the government to contribute towards its radical restructuring, and that existing SAA lenders will provide an additional R2bn.
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