Business school textbooks often talk of how important it is for an executive to be good at managing up, not just managing down. This could hardly be more relevant than for new Eskom CEO designate Dan Marokane.
His success will depend on whether he can rely on the support of his board and, crucially, of government. Marokane had better know how difficult that is going to be if he is going to tackle SA’s most difficult but most vital CEO job. He will be Eskom’s 15th CEO in just over 15 years and he should at least know the perils of the politics he is likely to face.
Marokane joined Eskom in 2010 from PetroSA and led the power utility’s commercial and new build divisions before he was suspended in 2015 — at the behest of the Guptas, as it turned out. The Zondo commission later described the suspension as “the crucial step to pave the way for the capture of Eskom by the Guptas”.
But Marokane must surely know that Eskom’s crisis is not just due to state capture but also poisonous politics. On the one hand, a host of vested interests preys on Eskom and stands in the way of necessary reforms. On the other, SA’s political leaders fight among themselves about the present and the future of the power sector and Eskom is caught in the crossfire. Add to that Eskom’s shareholder minister Pravin Gordhan’s well-known meddling, as well as a somewhat bizarre appointment process, and you have to wonder why Marokane has accepted such a poisoned chalice.
Yet SA should be heartened that he has. Where some of the previous Eskom CEOs had little if any experience managing large complex organisations, Marokane, a chemical engineer, has hard-core operational experience. He has worked in both the public and private sectors and can claim some turnaround expertise gained in his six years at beleaguered Tongaat, where he has ended up as acting CEO.
He will need all his skills and experience to tackle the formidable challenges he will face as Eskom’s CEO. Chief of those is keeping the lights on for SA. This is far from simple. Eskom’s power stations are in poor shape and many have been poorly managed. The power utility’s skills base has been hollowed out. Its procurement of essential inputs is complicated by corruption, as well as by excessive red tape. Eskom has little control over the pace at which new generation is brought on to the grid given this is in the hands of government.
Another challenge Marokane will face is restoring Eskom’s financial health. He has the advantage that the government has agreed to take on R254bn of Eskom’s debt in coming years, but he will need to ensure Eskom meets the conditions that the Treasury has set. That includes cutting costs and lifting its revenues.
He will have to do all this while also restructuring Eskom as envisaged in the government’s road map for the industry — a road map the government itself has been tardy about implementing. Eskom’s new Transmission Company has been set up, but Marokane must urge the government to speed it up so that it can operate and invest in new transmission capacity that SA needs for more renewable energy.
The list of challenges is long and we wish Marokane the very best of luck. SA needs him to succeed.
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