The trouble with writing anything down, including columns and books, is that they can be used against you. The Nazis got the Nuremberg trials for all their note-taking. Colonial Britain recorded, painstakingly, all the people they hurt or murdered, and the records lie now in the British Library.
But the biggest problem with columns and books is that they’re history the moment they’re written down. Former Eskom CEO André de Ruyter has just had that rush that comes with finishing a piece of work and the flurry of debate and argument that follows. But beyond dropping one or two names we probably all suspect anyway, De Ruyter's book, Truth To Power, is basically him done.
We thank him — or at least I do — for his service though he could have ended it better. Attacking the way people address each other is an ineffective way of dealing with the ideology that requires the people in our government to call each other “comrade”. That said, describing President Cyril Ramaphosa as a country club manager was, I thought, genuinely funny. And cruel.
The question is what happens to Eskom now. The new electricity minister, Kgosientsho Ramokgopa, has toured the plants and has something to say on television every day. But he is doing little more than Eskom, even before De Ruyter, and then Ramaphosa himself and then his National Energy Crisis Committee, have said before him.
Basically, they all say the same thing: Eskom should concentrate on fixing its plant. There are variations — fix all the plant, or fix the easiest plant while we pursue renewable energy and whatever else energy minister Gwede Mantashe can squeeze past his dithering boss. A bit of gas here, a Karpowership or two there. Some nuclear for our Russian friends. Anything to stop load-shedding before the May 2024 elections. Government is in a flat panic about it. Couldn’t happen to nicer people.
But all of the debate on Eskom now ignores the National Treasury, a bigger player than any of the aforementioned because the Treasury are the guys rescuing Eskom from financial ruin. Eskom doesn’t get to pee without the finance minister’s permission now that he has agreed to take over R254bn of Eskom’s near R400bn debt.
Here’s a take from Enoch Godongwana’s medium-term budget policy statement last October: “The National Treasury is leading a process to finalise a debt relief programme designed to restore Eskom to efficiency and financial sustainability ... The programme will include strict conditions required of Eskom and other stakeholders before and during the debt transfer ... In addition, the conditions will be informed by an independent review of Eskom’s operations.”
And then budget day in February: “Over the next three years, government will provide Eskom with debt relief amounting to R254bn. This will take the form of advances of R78bn in 2023/24, R66bn in 2024/25 and R40bn in 2025/26 ... Additionally, in 2025/26, government will directly take over up to R70bn of Eskom’s loan portfolio,” Godongwana announced, adding a string of conditions.
One I liked was that a “failure by Eskom to achieve and/or adhere to specific conditions will cause the loan amount from that quarter to be repaid to the National Revenue Fund at market rates.”
There were others, Eskom cannot build any more plant, it can’t sell anything to fund its operations and can’t make pay deals that weaken its finances. But there’s also the small matter of the “independent review” above.
Moneyweb interviewed Jeffrey Quvane, who oversees energy and telecoms at the Treasury, just after the February budget. “The idea behind the independent review,” he explained, “is that the minister wants to understand, at the power station level, what the root causes contributing to the decline in the operational performance of Eskom are...”
Yes, well, staring at an actual power station is all the rage in the cabinet at the moment, so transfixed are they all on finding the golden switch on some giant, dusty wall somewhere that will make the nightmare go away. It won’t, but at least Godongwana isn’t giving our money away. The “independent review”, said Quvane, would end in June or July.
The review consortium is made up mainly of big German power and engineering companies Vgbe, Steag, Dornier, KWS and RWE. Some of them will have supplied the very Eskom kit they’re now inspecting. In fact, the Germans may end up running some of the plant. Godongwana said in February he wants to see “proper maintenance” at Eskom. His budget review noted that “Eskom is required to implement the operational recommendations emanating from this independent assessment”. Or no money.
“This will include a determination of which plants can be resuscitated to original equipment manufacturers’ standards, following which Eskom must concession all these power stations with clear targets for the electricity availability factor and operations.” Or no money.
His cabinet colleagues may not always appreciate it, but the Treasury trumps them all. If a loan condition is concessioning (not to mention temporarily privatising) power plant then it will be so. I’m going to stop listening to what the electricity minister, and the president, or Mantashe, or Pravin Gordhan have to say. I’m going to wait to hear what the German independent review has to say.
• Bruce is a former editor of Business Day and the Financial Mail.
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