Time for Eskom to make tough choices
Date:Jul 27, 2018
Between January and March, Eskom raised R43bn from investors and lenders who have clearly warmed up to the new board and management team appointed in January. This is one of the few positive aspects of Eskom’s financial results for the year ended March, which showed the utility also lost a net R2.3bn in the period. Last year it made a net profit of R900m.
The other welcome piece of news is that Eskom is on the verge of securing up to 80% of the current financial year’s borrowing requirement of R72bn. This would put it firmly on the road to finishing its huge Medupi and Kusile power stations at Lephalale and Emalahleni, which will cost over R300bn at completion in 2023. By then, Eskom’s debt will be an unprecedented R600bn, from the current R387bn.
These milestones have been achieved since the departure of former executives Brian Molefe, Anoj Singh, Matshela Koko and others in the executive team, together with the boards appointed by former public enterprises minister Lynne Brown. Frankly, far too many of the people who found themselves on the board of this strategic utility, including Zethembe Khoza, should never have been allowed near any position of influence, let alone Eskom.
The board under Jabu Mabuza’s leadership and management under Phakamani Hadebe have a lot of what the previous boards and key executives have lacked in terms of business experience. Most importantly, they also have what the previous boards and management teams seem to never have considered: ethics, and the desire to serve the best interests of Eskom and SA.
That they have come in and cleaned up, firing many of those implicated in the rampant corruption and laying criminal charges against them, is admirable and bold.
These are also the easiest of the many steps in the long road to fixing Eskom. The hard task will be to eradicate the culture of impunity. That would involve a vigorous pursuit of those who benefited illegally from the R19.6bn in irregular expenditure the utility incurred in the years since 2012. In addition to this, there are known cases of brazen theft of resources by Eskom executives. As far as possible, the cash must be recovered and people must be jailed.