Pride comes before a fall. The departure of Eskom chair Mpho Makwana after barely a year in office was written before he ever warmed his seat. His leaving will be good for the utility and the country.
In equal measure, the immediate appointment of Mteto Nyati as his successor is good for Eskom and the rest of us. You could see in the choreography of the day leading up to the announcement on Monday that even public enterprises minister Pravin Gordhan had been unusually keen to ensure it all happened quickly. Stung by repeated accusations that he is slow at getting his job done, Gordhan was — for him — working at a frenzied pace to ensure Makwana’s departure was seamlessly filled.
Nyati, to put it mildly, will take no nonsense and not indulge in any himself. This is vital as Eskom seeks a CEO to replace André de Ruyter, who tendered his resignation last December after someone in Eskom tried to poison him.
When asked for his reaction to the attempted murder, Makwana, a marketing man, said he would not respond in public as the issue was “not in my purview”. As chair then, not exactly a magnet for a discerning new CEO.
He then proceeded to speak for Eskom operations as if he were running the company and not merely the board. Eskom would, he declared, get its energy availability factor (EAF) back over 60% by the end of March 2023 and over 65% by the end of March 2024.
Well, not so fast Louie. He never even came close. By last week, when Eskom released its weekly EAF, for what was then week 39, it was 56.69%.
On Monday Nyati, who made a name for himself when he became CEO of the storied Venter family business, Altron, and essentially wrenched it into the 21st century, announced his resignations from the boards of both Nedbank and Telkom. A Business Day editorial the next day called his resignations “a rare example of a corporate leader knowing when to quit”.
I felt for my colleagues because the decisions about what to write in editorials, and who will write them, are taken early in the day. Later on Monday though, when the editorial page was done and dusted, Gordhan announced Makwana’s departure and Nyati’s appointment as interim chair. But he was clearly not finished and my guess is that Nyati was worked over until he agreed, hours later, to become a permanent replacement.
Behind the curtains Gordhan had been sweating. It had become clear in recent weeks that his relationship with Makwana was not good. Not only was Makwana involved in operations (he had done the job before, standing in briefly as CEO when he was chair in 2009) but his board had submitted just one name as a replacement for De Ruyter instead of the three Gordhan requested.
That had taken months. Gordhan then sat on it for more months before rejecting it. There was disagreement about the age of the new CEO — Makwana’s board had opted for someone younger than 60 and Gordhan, either because he had someone older than that in mind or because he doesn’t like being told what to do, rejected it.
In picking Makwana in the first place Gordhan had taken an inordinate 32 months to find a permanent replacement for Jabu Mabuza, who resigned in January 2020 after promising, and then failing, to stop holiday period load-shedding. Malegapuru Makgoba, then the lead independent director on the board, was appointed interim chair and ended up staying for almost all of De Ruyter’s term.
But there is a deeper reason for hurrying up the board-level changes. Gordhan has already been warning that the break-up of Eskom into its generation, transmission and distribution arms is taking too long. He says the timelines are “elongated” and wants the new, nominally independent but still state-controlled transmission business, which will buy power from Eskom and private sector suppliers, up and running by April 1 2024.
That’s just before the next election and Gordhan is unlikely to return to government after that, and his department is likely to be disbanded. An ANC conference policy decision to “return” state-owned companies to the direct departments will be fulfilled.
At mineral resources & energy Gwede Mantashe has stood against the faster introduction of renewable energy in the country and is generally considered a problem by Gordhan and, probably, President Cyril Ramaphosa as well. His response to Makwana’s departure was that it reminded him of “mice running from methane in a mine”.
The methane here may be policy failure, and it has become vital that while Mantashe may get control of Eskom next year he does not control the mix of energies sent through the national power grid. This would most likely fall to the new electricity minister, Kgosientsho Ramokgopa.
In this scenario Mantashe would be left with Eskom’s underperforming coal-fired rump. And the Treasury, which is bailing Eskom out of its R400bn debt, strictly controls any new investments it can make. That will further limit Mantashe’s scope for mischief-making. And now he has a no-nonsense chair to deal with.
So, a good result for Gordhan and, probably, Ramaphosa, for the moment. You won’t easily see, but it’s an arm-wrestle in cabinet and Monday’s two-step — resignation and appointment — were big moments.
• Bruce is a former editor of Business Day and the Financial Mail.
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