Political interference has created the Eskom crisis and the last thing the country needs is for minister of energy Gwede Mantashe or the ruling party to be involved in the appointment of outgoing CEO Andre De Ruyter's successor, says CEO of the South African Chamber of Commerce and Industry (SACCI) Alan Mukoki.
“I heard the minister for energy, who apparently will be given oversight over Eskom, say the ANC will be involved in the appointment of the next CEO. We disagree strongly with that. We don't think the ruling party or the minister have any level of expertise or capability to be meddling in the appointment of the CEO.”
De Ruyter handed in his resignation last month after Mantashe accused Eskom of “agitating for the overthrow of the state” by not ending load-shedding. He leaves in March.
“The board should be solely responsible for the appointment and performance of that CEO so you have a clear understanding of who you're holding accountable,” said Mukoki.
“Right now you've got a board, a minister who wants to get involved and a ruling party saying it wants to get involved. That is not going to solve anything.”
It's this level of political interference that created the Eskom crisis in the first place, he says.
“If you as the board want to act against the CEO you'll be afraid because you think the CEO belongs to the minister because it's the minister who appointed the CEO.
“If you don't want to be fired as a board member, you'd better comply with the minister's wishes.”
That could be dangerous, he said.
“The minister has no experience, skill, competence or capability to know what needs to be done.”
The number of Eskom CEOs since 2008.
— IN NUMBERS: 13
Mukoki said small businesses are being devastated by the scale and unpredictability of load-shedding.
“When you're constantly moving from stage 4 to 6 and even 8, which is looking possible, the disruption is huge. It's creating an existential crisis for smaller businesses.”
Even if they survive, they can't expand or create more jobs because they can't take on more customers and risk making commitments they don't know if they'll be able to fulfil. Not fulfilling them is a disaster because for most small businesses reputation is everything.
“Many of them operate on just-in-time processes. They only make what is ordered, they can't afford to stockpile because that costs money in terms of insurance, warehousing and so on.”
The unpredictability of Eskom power generation means these businesses can't give their clients guarantees regarding delivery. As a result, clients are shifting to suppliers in other countries, which is having a devastating effect on the sector, which the SACCI mainly represents.
“We've been in constant communication with Eskom to structure load-shedding around production cycles so it doesn't impact smaller businesses as hugely as is happening,” said Mukoki.
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“Load-shedding is too random. Businesses don't know if they're going to be at stage 2, 3, 4 or 6 at any time.”
That De Ruyter and his management have been unable to provide the predictability businesses require is not their fault, he added.
“In all fairness, every time we've called on De Ruyter and his people, they've made themselves available.
“But they're facing massive headwinds in terms of legacy problems, huge issues with maintenance, huge issues with sabotage, huge issues with criminality.
“These things are there, we have to confront them. All of us as South Africans.”
Mukoki wouldn't comment on De Ruyter's exit.
The issue is the system, not the individual, he said.
“When you have a system you have institutional consistency. Your hiring, retention and performance evaluation are based on something that is scientific.
“Thirteen Eskom CEOs since 2008 suggests no such system. Part of the problem at Eskom is the lack of a template.”
Those who think they're solving the problem at Eskom become the problem because they don't understand what the real issues are, Mukoki added.
“We've campaigned, we've lobbied, we've written to government to say we need to have a clear understanding about what is going on at Eskom.”
One of the first things raised was the appointment of the new board last year.
“How did the government know the reason we had a problem at Eskom had to do with the board? It looked random. It's not clear they understood what the real problem was.
“What if the problem was with the quality of middle management, a big supplier or logistics? What if the issue is that with 40,000 employees Eskom is overstaffed?”
A big problem is that many issues have been too politically sensitive to raise with ministers, Mukoki said.
“For instance, if the level of production in terms of power generation is far less compared with the number of personnel you have on the payroll it's clear you're going to move into headwinds with the unions.
“But it needs to be confronted. How many people do you think need to go? Ten thousand, 12,000? That's a conversation you need to have with the unions.
“You can't have a situation where things like this can't be discussed with ministers because the unions are so strong within the ruling party.”
There's no point having a new board that feels too beholden to the minister to raise politically sensitive matters that must be thrashed out to fix Eskom, he said.
“A fundamental cause of the problems at state-owned enterprises (SOEs) such as Eskom is that their boards have been chosen by the government.
“We don't think cabinet has the competence, skills or experience to appoint SOE boards.
“We need people of unquestionable integrity, experience and performance to choose board members. The minister can sign off on that. What you can't have is a situation where ministers are choosing board members.
“We haven't had a positive response from government on whether it isn't time for cabinet to stand back and allow experts to make these determinations,” Mukoki said.
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