Molefe to head up Eskom again: what’s going on?

May 12th, 2017, Published in Articles: EE Publishers, Articles: Energize

 

Eskom’s board has apparently decided to reinstate Brian Molefe to his position as CEO of the power utility with immediate effect. This follows a dispute between the board and the minister of public enterprises over a payment Molefe was to receive.

Roger Lilley

Molefe left the utility at the end of 2016 after hearing that he had been named in a report on so-called state capture by the former public protector, Thuli Madonsela. The report implicated him in “improper and unethical behaviour” regarding the supply of coal from the Tegeta mine which is co-owned by the South African President’s son, Duduzane Zuma, and a family of business people, the Guptas.

The report is supported by an audit report which was compiled by PriceWaterhouseCoopers and recently presented to Parliament’s Standing Committee on Public Accounts.

The report is said to reveal numerous flaws in the procurement process and shows that the mine charged Eskom very high prices for sub-standard coal.

Molefe said, at the time of his resignation, that the report damaged his reputation and that he could not continue until his name had been cleared. But his name has not been cleared.

The fact that the country’s president appointed him as a member of parliament does not prove his innocence, it demonstrates the president’s disregard for ethics and could even be viewed as a reward for Molefe’s support of the Guptas.

So why is Molefe back in his old job?

Suggestions have been made that the board’s offer to reinstate Molefe is in some way related to the amount of R30-million Molefe was expecting as a “pension” payout from the utility, which has been blocked by Lynne Brown, the minister of public enterprises.

Questions have also been raised as to what value Molefe could bring to the utility as its CEO.

When he was first appointed to the post he made quick and measurable improvements to the power utility’s power producing plants’ performance by reorganising the maintenance schedule, thereby improving reliability.

Today, the utility has a surplus of electricity generation capacity – partly as a result of improved generation performance and partly as a result of a dramatic reduction in demand for electricity, especially in the industrial, mining and manufacturing sectors, due to the state of the economy.

What Eskom needs now is not a “Mr. Fixit” but someone who can improve the sale of the surplus electricity the power utility can produce in order to improve its financial position. As a result of its poor fincial position, Eskom has been downgraded twice – on Molefe’s watch – by international ratings agencies, making borrowing much more expensive.

One wonders if the decision to reinstate Molefe was made at higher levels – to keep the contract for the supply of coal from the Tegeta mine, and to ensure an ongoing source of revenue for its owners: the Guptas and Zuma’s son. In that case, this could be just another example of state looting by the one who seems to “get away with murder”.

Send your comments to energize@ee.co.za

 

 

 

 

 

 

Related Tags

Subscribe to our leading email newsletters

FREE-OF-CHARGE

CLICK for other EE Publishers information products