ALEXANDER PARKER: Business needs to play hardball with the state

Absa’s decision not to finance Karpowership SA cropped up at its AGM last week. It’s not a new decision for the bank, but should nonetheless be a warning to corporate SA about the risks of being associated with bad ideas.

On the face of it, Absa was a well-meaning potential funder that considered financing a solution that would contribute to easing the energy crisis, but something put it off. It hasn’t said what it was about the deal it didn’t like, but we can hazard a guess.

Organised business is desperate for a quick and lasting solution to the energy crisis. Beyond the organisations we are used to, such as Business Unity SA, Business For SA and Business Leadership SA, which have a long-standing relationship with the government to advance the best interests of business and the country, we now have additional structures such as the national energy crisis committee and Energy Council of SA, which want to help the presidency get on top of load-shedding.

Why add another layer to an already well-established framework? What organised business has been doing with the government over the past decade still hasn’t been able to move the needle on the energy crisis. It feels it has to do even more to protect businesses and look after their customers, staff and shareholders. That means it is throwing time and money into fixing social and existential national problems despite there being an entire government with 1.3-million employees and trillions of rand at hand. There is something important to read in this.

The level of the engagement, the seniority of the CEOs and the size and importance of the companies working with the presidency to give offers of support, fund mobilisation and technical expertise is a clear indication that things are not going well. It is not the job of Discovery or Sasol or Toyota or Anglo American to fix power stations, but they’re doing what they can to help.

I think it’s slightly terrifying. They’ve had a look under the bonnet and they’re panicking. As much as this is an alarming realisation, there is something positive in it. The corporates have seen that Eskom is technically hollowed-out and therefore the businesses engaging with the government hold more power than they appear to be exercising.

The interactions I’m seeing are in the old mould of how big businesses have always spoken to and about the government in our cosy state/big business relations. There is all kinds of genuflection and few people ever seem to say anything too critical. It feels like an instinctive tone business leaders take on. Now might be the time for some straight talking though, because the power relationship is shifting.

Nobody believes a thing it says anymore, whether it’s a load-shedding outlook for the week ahead, an explanation for Transnet’s inability to run ports and trains, or the grandiose announcement of a new minister’s new powers.

The ANC is in huge trouble. It has shattered into a disorganised flotilla of financial interests associated with patronage. It has no collective interest in reforming while in office. With that in mind, the party desperately needs to stop load-shedding if it has a chance of clinging on to power in 2024. The state cannot do it alone.

We’ll see similar engagements from the presidency with the business community on the issues of crime and logistics in the coming months. It’s all broken and the government can’t fix any of it without help. This is no way to run a country, but this is organised business’s moment to insist that things are done in a manner that puts the country first, and to walk out the moment there is nonsense. A 20-year powership deal is the very definition of nonsense, and Absa has put its reputation first and walked away.

Aside from the technical gaps in the state-owned enterprises and state, another asset the state has destroyed is its credibility. Nobody believes a thing it says anymore, whether it’s a load-shedding outlook for the week ahead, an explanation for Transnet’s inability to run ports and trains, or the grandiose announcement of a new minister’s new powers.

People don’t feel the same way about big companies. Generally speaking, if Toyota says it’ll do something you tend to believe it. Trust is a powerful asset that takes billions of rand and years to build, and corporate SA should not lend that asset to this government unless it has a suitable level of control over the energy, logistics and crime interventions that are taking place.

The energy plan’s starting point is to fix Kusile and Medupi power stations to full capacity and get Koeberg up and running on schedule. Just one sentence, but so many ways in which it is already going wrong. Koeberg’s life extension will run late, resulting in licensing issues, and Kusile and Medupi have proved to be astonishingly unreliable. Corporate confidence in the plan is bewildering. What exactly has changed to clean up the coal supply chain? What has been done to fix the sabotage-and-tender merry-go-round? Why will it work this time around?

If I was running a blue chip or the local arm of a multinational, I’d want to see deep into the planning of how things will be achieved before putting my logo anywhere near an organisation committed to that process. It’s time for businesses to play hardball with the people running our energy and logistics monopolies. They need to leverage their good names and capacity to ruthlessly drive an efficient and sustainable resolution to our energy crisis. If they can’t, they need to get out, protect those good names, and see who’s around to work with after the election.

• Parker is Business Day editor-in-chief.