The palace politics that infected state-owned companies during the Zuma era is still the order of the day in the energy sector.
Conspiracy theories and stories of bribery and corruption still circulate in anonymous WhatsApp messages and political chat groups; non-executive directors still engage inappropriately in operational transactions with private companies; and wildly ambitious business plans are still being hatched, despite financial realities.
And, importantly, we are nowhere yet on holding anyone to account for what was perhaps the most brazen heist of the state-capture era: the illegal sale of SA’s entire strategic fuel stockpile.
Last week energy minister Jeff Radebe was finally moved to take some action, firing the chair of the Central Energy Fund (CEF), Luvo Makasi, after an allegation that he had solicited a bribe began circulating.
The claim was that Makasi had met a representative of Dutch oil trader Vitol — one of the companies that bought the strategic stocks in December 2015 — and suggested that in return for a large sum, he could make the CEF’s court application to overturn the sale, which is before the high court in Cape Town, go away.
Also named in connection with the bribe was Radebe, deputy president David Mabuza, ANC treasurer-general Paul Mashatile and energy director-general Thabane Zulu who, it was claimed, had all been mentioned in Makasi’s conversation with Vitol as potential beneficiaries of a financial inducement.
Makasi strongly contests this version of events, saying he had met Vitol representative Harvey Foster at his request to discuss several matters. Vitol says its representatives met Makasi but won’t disclose what was discussed.
Though the allegations were poorly substantiated in the WhatsApp chat in which they were conveyed, Radebe must have felt that aside from rumour he had compelling evidence to remove Makasi. He is not usually a man to be rushed into action. He has hardly reacted to some of the other strange goings-on at the CEF over the past year.
Another eyebrow-raising transaction to which Makasi was connected is the rescue of Optimum mine, the former Gupta-owned colliery, now in business rescue. In February it was announced that the state-owned African Exploration and Mining Finance Corporation (AEMFC), a subsidiary of the CEF, had been awarded a contract to provide post-commencement funding, which will be used to fund the business-rescue operations and restart Optimum operations.
This gives AEMFC and its consortium partner Lurco a headstart in the queue to buy Optimum, which judging by the interest being expressed from diverse quarters is a desirable asset. It was the CEF’s commitment to stump up the R1bn in funding that clinched the deal, said the business-rescue practitioners.
Radebe, who along with the finance minister would have had to approve this transaction, has not said a word about it. Neither has he publicly commented on the inordinately long delay in appointing and finalising a forensic investigation into the sale of the strategic stocks.
Perhaps, like his boss President Cyril Ramaphosa, Radebe is just taking his time to clean house. Mind you, though, he seems to be taking his time about everything.
When he was appointed energy minister in February 2018 he had two pressing tasks: sign the power-purchase agreements between independent power producers (IPPs) and Eskom; and get an updated Integrated Resource Plan (IRP) through cabinet.
The IPP contracts have thankfully been signed and within the next two years should bring some much-needed additional capacity into the grid.
But the IRP — the government’s long-term energy plan on which many investment decisions rest — is still outstanding, having reached Nedlac only two weeks ago after a string of unexplained delays. With only one more scheduled cabinet meeting to go before the end of this administration, the prospects of getting this priority task done are looking bleak.
As energy decisions are deeply political and the fight against IPPs has turned into a proxy Zuma versus Ramaphosa war, the IRP is a politically controversial document. Radebe, though, is not known for his political courage. With only a short time to go before the election, he may have decided that it is better to keep his options open. After all, he didn’t get to be the longest-serving cabinet minister in the country by being proactive.
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