The Jacob Marley column: All right on the night

February 6th, 2014, Published in Articles: Energize

 

Sir

Ever since the resignation of Eskom CEO Brian Dames was announced, the country has been abuzz with all manner of concerns. Most prominent amongst these relate either to jumping or pushing, or wondering about timing. Also questions about achievements past and present, of course, legacy and, lest we forget, the size of the golden handshake (XXL or XXXL) and all manner of similar banal topics. Most important, perhaps, is the Big Question: who next? Perhaps, what next?

I might disappoint your readers from the outset by stating that first of all, I am not in a position to betray the confidences of my friend the Ghost of Christmas Future, and secondly, that it is perhaps not a sound question to ask in the first place. Perhaps the question should be: does Eskom really need an expensive non-CEO? The place has been doing just fine in the last three years, has it not?  Nothing to scare one to death about, is there?
Companies, of course, are owned by shareholders, who appoint a board of directors, who in turn elect a chairman and appoint a CEO to run the business. In the case of Eskom there is only one shareholder, the State. And the representative of this shareholder is the Minister of Public Enterprises. The honourable and energetic Minister takes his job very seriously. In a speech made last year and reported in your august magazine of November, Sir, he was, inter alia, quoted as saying:

“It is a pleasure to lead Eskom as we provide our regular State of the System briefings to the nation”  and  “… I am happy to announce that as at 31 August 2013, of the nine units Eskom had committed to long duration generation maintenance over winter, five were complete, three are in execution and one is awaiting to be released in the next weeks” and also “My department with the Eskom board and management are undertaking recovery work in relation to welding faults and control and instrumentation.”

These stirring statements have a certain ring to them. In the case of one of the larger mining houses or industrial corporations, they would be made by the CEO (or perhaps an executive chairman) but would draw a high percentage of raised eyebrows if they came from a shareholder, albeit a large one. Shareholders leading an organisation? Shareholders scheduling plant maintenance and carrying out welding repair work? Nothing to worry about, of course, but will it be all right on the night?

It raises another interesting point. What has the CEO being doing while the shareholder was leading and directing the organisation? Was he perhaps assessing the returns on his investment and deciding on where best to place his funds? Did he perhaps read the annual reports and attend the AGM? Of course, he would have made handsome returns if he had made the right choices. If, for the sake of argument, we postulate that as a possible scenario, we might reach some interesting conclusions.

For a start, load shedding has reduced dramatically if you live in the electorally sensitive pockets of the nation. No one asks why, although margins are tighter than ever. Better management? More skills? Tighter discipline? Heads will roll, etc.? Better customer focus? It shows how much better the system is being run these days than in 2008, isn’t it? All right, isn’t it?
In fact, growing numbers of customers get free electricity either paid for by the taxpayer or through the highly industrious bypassing industry and its partners, the billing system scammers, conners and corrupters. As the song says, take life for granted, nothing more to pay.

If you are a large user of electricity, of course, you didn’t qualify for these benefits, but since the economy is in the dumps, your demand has dropped anyway, fuelling further economic decline, job losses, loss of investor confidence, and plummeting shareholder returns. So it’s not the end of the world to get some compensation for enforced shedding of load you would have lost anyway. No need for the present situation  to scare one to death. You know that everything is going to be all right, don’t you?

Even on the financial side, Eskom is doing just fine at the moment, isn’t it, even better than when it had a finance director? Or a head of communication? Do they still have someone in charge of building new power stations? Think of the tremendous cost saving. Why, it will probably help to offset that vicious cut in tariff increases imposed by the mandarins at the regulator, although the rating agencies didn’t quite see it that way. But it will be all right on the night, so the PR gurus at the ministry assure us. Who knows, with a little bit of luck it might last until after the elections. So have a little fun today because, like, you know, Eskom is doing just fine.
It seems that even the Eskom board tries to interfere as little as possible with the status quo. Board members, appointed by the shareholder, are recipients of comfortable stipends, of course, and generous travel and accommodation allowances. More than that they do apparently not aspire to, because why rock a boat that is doing all right? Some storm in the teacup puts them to the test periodically, no doubt, but with the strong leadership demonstrated by their shareholder representative, why bring in a disruptive CEO to upset the apple cart?

The long and the short of it is, Sir, since Eskom is doing all right, why now disrupt things by appointing a new CEO who is an energetic business leader, a visionary who cares about the environment, a strategist straight from Stanford, pre-eminent in the electricity market, not only at home but well-respected regionally and internationally, a financial and technological  wizard, preferably with a double Nobel?  It’s doing all right without him, isn’t it?

As long as it does, Sir, and it does not turn into a dark night, I remain your humble and obedient servant

Jacob Marley

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