The announcement on Friday that Phakamani Hadebe is to leave his job as Eskom CEO will have come as a surprise to no-one, and probably should have happened much earlier.
In some ways, Hadebe’s time was up before he had barely started. Which is sad. He was appointed permanently in May 2018, and one can plausibly argue that his powers were usurped by the government the next month and there was never a sense he was really in charge.
A lot will and has been said about his lack of technical skills for this particular job, which would have been an enormous challenge even for someone who had spent their whole life running power stations.
The one thing he did understand was finance and from early on he was clear that Eskom was not a sustainable business and something drastic needed to be done. But its shareholder, the government, never seemed to have the same sense of urgency.
I first encountered Hadebe in his previous life as a public servant working at the Treasury. Looking back now, those were the glory days. Thabo Mbeki, who had many faults of his own that have since been dwarfed by what came after him, was president and the economy was growing, jobs were being created and Sars was so good at its job that the middle classes were getting tax cuts.
Under the leadership of Trevor Manuel as minister of finance and Maria Ramos as director-general, the country’s economic management was something to be admired, and Hadebe was part of that team. And so was one Brian Molefe, but the less said about the latter the better.
Being a young journalist covering bonds and government finances while I was trying to learn about them, I couldn’t help but be impressed by Hadebe, who was responsible for asset and liability management at the Treasury. He was intelligent and obviously knew what he was talking about, but was also patient and generous with his time, and happy to explain the most basic concepts.
In the wake of industrial action and criminal activity that sabotaged power stations, he was overruled and Eskom would eventually go on to agree inflation-busting wage agreements
More than a decade passed before I would encounter him again. By this time he was Eskom CEO and we would briefly reminisce about those days and mentioned how that period was the highlight of his working life. It’s a pity for him, and the country, that the Eskom episode would go nowhere near surpassing it.
Recognising the dire state of the company’s finances and the reality that no amount of government bailouts would take it on a sustainable path, he sought to deal with the one thing that as CEO he should have been able to control: Eskom’s workforce had doubled in a decade despite it selling less electricity and losing customers.
So this logically seemed a good place to start. And Hadebe did exactly that, announcing that the company would freeze wages. In the wake of industrial action and criminal activity that sabotaged power stations, he was overruled and Eskom would eventually go on to agree inflation-busting wage agreements.
Undermined by the shareholder who was supposed to back him, he was instead ridiculed as being naive and not being in touch with politics — never mind that he wasn’t appointed to win elections but to turn around what was a rapidly failing business with the potential to sink the whole economy.
From then on, one never got the impression that the CEO was in charge, and with hindsight he might feel he should have walked away then, irrespective of any sense of duty he had.
During the load-shedding crisis towards the end of 2018, Eskom called media conferences and the optics in one of them confirmed that power, or the lack of it in Eskom’s case, didn’t lie with the CEO. At the centre of the table, there was chair Jabu Mabuza and public enterprises minister Pravin Gordhan. The CEO was at the far end, taking the odd question.
Whether subsequent events showed him unsuitable and unqualified for the task is a subject for another day, but what’s clear is that Hadebe, a decent and patriotic man, never had a chance.
With the CEO gone, serious questions now have to be asked about the performance of the board and ministers.
It is perhaps with a hint of irony that Hadebe’s resignation was confirmed on the eve of President Cyril Ramaphosa’s inauguration. As everyone who is still bothered to keep repeating it says, Eskom is by far the biggest risk facing the country, and time has long run out for the government not only to come up with a plan but to implement it.
Instead we get mixed messages from the shareholder. The president has appointed a task team on Eskom’s sustainability that has hatched a plan to transfer some of its debt into a special purpose vehicle. When asked about this, the finance minister apparently told Bloomberg he had never heard of it.
That kind of leadership from the shareholder makes one wonder if it matters who the CEO is.
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