In a shocking but “not surprising” move that threatens to throw Eskom into a leadership crisis during one of the worst energy crises, CEO André de Ruyter resigned on Wednesday.
At the helm for three years, De Ruyter will remain in the role until the end of March 2023 while the board led by Mpho Makwana conducts a search for the new leader of the company.
The utility plays a crucial role in an economy that has been hobbled partly by a crisis in electricity supply. De Ruyter’s exit also comes at a time when Eskom finds itself in the precarious position of having to navigate the country through a transition of its electricity sector towards a low-carbon future, while facing the criticism of politicians and unions that oppose the phasing out of the use of fossil fuels in SA.
“Government and SA now face the challenge of finding a new CEO that will be expected to walk into an environment where he or she won’t know from one day to the next which direction an attack is going to come from,” said Hilton Trollip, an energy research consultant and fellow at the University of Cape Town,
Referring to mineral resources & energy minister Gwede Mantashe, Trollip said: “As a senior ANC member and member of cabinet, Mantashe making comments that Eskom was undermining the state makes it very difficult for the CEO of Eskom to have authority and to maintain trusted relationships in government.”
He was referring to a public engagement last week at which Mantashe accused De Ruyter of treason, saying the former Nampak executive was “actively agitating for the overthrow of the state” via load-shedding.
De Ruyter has served three years in the post and he was the ninth CEO (including acting CEOs) since the departure of Brian Dames in March 2014, making him the longest-serving CEO there in the past 10 years.
In a statement confirming De Ruyter’s resignation, the Eskom board said that there was no plan for Makwana, who has previously served as an acting CEO of the utility, to become an interim CEO.
The rand, which had strengthened more than 1% during the session, gave up some gains after De Ruyter’s decision to go was first reported and was 0.4% stronger in evening deals. Yields on the company’s dollar debt due in 2025 picked up 4 basis points to 11.3%.
Chris Yelland, energy analyst of EE Business Intelligence, echoed Trollip’s comment, saying that given the lack of political support given to De Ruyter his decision to resign was understandable.
“Without a single public word of support from [President Cyril Ramaphosa], [public enterprises minister Pravin] Gordhan and the new Eskom board chair, and after the attack by minister Mantashe accusing De Ruyter of treason, I would expect nothing different except that [he] should resign in disgust,” Yelland said.
There were contradictory reactions to De Ruyter’s resignation from SA’s business community and the unions that represent workers at Eskom.
Kganki Matabane, CEO of the Black Business Council, told Business Day that the council “welcomed the news” and thought it was long overdue.
“The country is losing R4bn a day due to load-shedding and Eskom needs a turnaround specialist — someone who can come in and fix [it] instead of someone who spends his time working with renewable energy lobbyists,” Matabane said.
Business Unity SA CEO Cas Coovadia, on the other hand, said De Ruyter’s resignation was “a major blow for Eskom and the efforts to address the energy crisis we are facing on an ongoing basis”. But, he said, it was “hardly surprising, given the irresponsible comments by some in government and some other sectors”.
The National Union of Metalworkers of SA, one of the main unions that represent Eskom workers, welcomed the news of De Ruyter’s resignation.
“He is clueless about ending load-shedding. Under his leadership we have experienced the worst load-shedding in history. The economy is collapsing under his watch. The sooner he goes, the better for all of us,” the union said.
Trade union Solidarity, which also represents Eskom workers, said the resignation would deepen the Eskom crisis, not alleviate it. “The wrong person resigned. The problem at Eskom is not the CEO’s operational will but the government’s political will. The best person in the country can be appointed to the position but the current political dispensation makes it an impossible task for the person.”
De Ruyter’s resignation — albeit because of what Business Day understands are personal reasons due to the pressures of a thankless job — came just 36 hours before the ANC’s national conference. With SA again gripped by severe load-shedding, Eskom is widely expected to be the elephant in the room.
In the past, both Gordhan and De Ruyter have blamed this year’s blackouts on sabotage by those still within and previously at Eskom who had entrenched state capture at this and other state-owned enterprises during former president Jacob Zuma’s term. It is also notable that severe load-shedding cost the ANC votes in the local government elections last year, according to polling.
Update: December 14 2022
This story has been updated with new information.
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