EDITORIAL: Mavuso controversy highlights what is wrong with our SOEs

There’s a sense in which the controversy that’s erupted over the spat between Eskom board member Busisiwe Mavuso and parliament’s standing committee on public accounts (Scopa) chair Mkhuleko Hlengwa captures everything that is wrong with the governance of SA’s state-owned enterprises.  

Scopa was on an oversight visit to Eskom to get the power utility to explain the current round of load-shedding. In a meeting with management and board members on Friday, Mavuso told Scopa that the board and CEO André de Ruyter could not be the “fall guys” for the ANC-led government.            

“The reality of the matter is this is not our mess,” Mavuso was reported to have said. A heated response from Hlengwa then saw her leave the meeting. The public enterprises department then laid into her too, describing her conduct as “regrettable” and “unbecoming” for a board member.

Mavuso may have been more strident than the committee or Eskom’s shareholder ministry might have liked, but she is after all an independent, non-executive director of Eskom who is entitled to her say. Indeed, in a world of proper corporate governance, a director with independent views — as long as they are informed and constructive — would be someone to be valued, not someone to be treated as if she were a naughty schoolgirl.

But the governance of our state-owned enterprises (SOEs) is far from proper. One is tempted to ask why board members are expected to be present at all at meetings that are fundamentally about operational issues. But it’s long been standard stuff in the public sector that ministers and board members get involved in issues that in the private sector would be the responsibility of executive management. And that reflects the profound confusion of roles and responsibilities all along the chain from ministry and parliament to the executive management that has long been a factor in the dysfunction at Eskom and other SOEs.

In theory, they are state-owned corporate enterprises, not government departments; the government should give them a clear mandate and appoint competent boards to oversee that an efficient management delivers on the mandate. In practice, the SOEs have been subject to political pressure and interference of all sorts, and not only in the state capture years. There’s little evidence that all that political oversight — or interference — has been particularly helpful in enabling SOEs such as Eskom and Transnet to deliver the efficient services SA’s economy so desperately needs. Arguably, the interference from politicians and their lackeys on the board is what made the SOEs so easy to capture. Perhaps one day we can hope for some governance and role clarity from the committee on SOEs that President Cyril Ramaphosa appointed some time ago.

But what of the substance of Mavuso’s outburst? There is plenty of truth in the charge that the government is to blame for some of what ails Eskom. And it was quite disingenuous for the ANC’s new economic transformation committee chair to lay into Eskom as she did earlier in the week, as if the ANC-led government was blameless. It’s not just that the government failed historically to ensure that new generating capacity was built in time, but that the government continues to go slow on enabling new capacity. It’s opened new windows for renewable energy only after a years-long hiatus. It’s been persuaded to allow private generators to build their own power, as Eskom and business had long urged, but has tied up the process in time-consuming bureaucratic knots. Similarly, Eskom faces cumbersome bureaucracy in the procurement it needs to do to fix its ailing power stations.

For all that, Eskom’s board and management cannot be exonerated from blame for the mess, as Mavuso suggests. New capacity is urgently needed. But the board and De Ruyter are accountable for fixing the existing capacity. They do need to explain why the more maintenance Eskom does, the worse the performance of its power stations seems to become. Let’s not forget that De Ruyter once promised that the risk of load-shedding would diminish by September 2021. He and the board bear responsibility for the fact that the risk has not diminished but increased. But it is also certainly true, as Mavuso said, that the ANC-led government does too.