company
Mungo Soggot
The chair of Eskom, Reuel Khoza, has a material interest in the company Eskom is paying to research and develop a new nuclear reactor. He also sits on a committee that advises the government on the nuclear programme.
Khoza is the founding chair of Co- ordinated Network Investments (CNI), an empowerment group that has as one of its main investments a 29% stake in Integrated Systems Technology (IST).
IST is one of the main beneficiaries of the R90-million Eskom has pumped into researching and developing a new reactor, known as the pebble-bed modular reactor.
Khoza sits on Eskom’s nuclear oversight committee, which, in his own words, ”interfaces” with the government on the nuclear programme. Only Khoza and one other Eskom official are allowed to talk publicly about the pebble-bed scheme.
This, he says, is because the government has yet to decide on whether to push ahead with the construction of the reactor, estimated to cost more than R1-billion. According to The Sunday Independent, Eskom wants to have the first of 11 reactors up and running within five years.
Asked whether he was concerned about a conflict of interest, and whether he felt he could give impartial input to the nuclear oversight committee, Khoza said: ”These are perceptual issues. I am here to look after the national interest, given that Eskom is a national utility. That, for me, is more important than anything else.”
Khoza, who is the non-executive chair of Eskom, spends an average of one-and-a- half days a week at Eskom, and most of the rest of his time at CNI, which has a string of other investments in leisure, gambling and tourism. Some of these are in partnership with Gensec, an asset management company that has recently invested R250-million in CNI.
In addition to his duties on the nuclear oversight committee, Khoza also sits on the parastatal’s human resources and personnel committees. He says he has no influence in the day-to-day management of Eskom, such as selecting outside contractors.
Khoza is one of South Africa’s most prominent black businesspeople. He became chair of Eskom in March 1997. He says that IST, which has several other contracts with Eskom, has been talking to Eskom about the pebble-bed reactor since 1993.
He says he has declared all his interests to Eskom and the government. Khoza was on the board of IST, but stepped down last September, along with another CNI executive. Two other CNI executives replaced them on the Eskom board, including Gary Morolo, who became IST’s chair.
Khoza says his departure from the IST board had nothing to do with a potential conflict of interest with his Eskom job, and took place because of a reshuffle within CNI.
He says there was a long-standing and ”mutually beneficial” relationship between Eskom and IST before he took up the Eskom post. ”Should I have discontinued a mutually beneficial business relationship? Should I have divested myself of my interests in IST? I declared them, which is what I must do in terms of corporate governance,” he says.
Khoza says it was for the government to request that he stand down. ”It is the prerogative of the government to tell me what I should be involved in.” Asked whether any government official had ever suggested he step down from the nuclear oversight committee, or the Eskom board itself, he said: ”You are asking a question about government micro-managing. I can’t remember that anyone ever raised it.”
Khoza says he decided to restrict discussion about the pebble-bed reactor because ”the media wanted a debate. The IMCC [a committee of ministers that presides over state asset restructuring and privatisation] is still finalising a framework on nuclear policy.” Khoza said the IMCC should decide on whether to push ahead with the scheme ”sooner rather than later”.
Asked to comment on industry talk that IST wanted to secure an equity stake in the pebble-bed reactor, Khoza said: ”You should ask IST.” He said IST had only provided research and development advice, and would have to bid in an open tender to participate in the reactor’s construction.
The rest of the team investigating the nuclear reactor include scientists from Russia’s, Britain’s and China’s nuclear programmes.
Commenting on the sluggishness of government policy on the nuclear programme, Richard Worthington of Earthlife Africa Johannesburg was last week reported as saying that ”Eskom and particular interest groups in Eskom are in effect setting the policy agenda. The more money is wasted on the pebble-bed modular reactor, the more likely it is to get approval.”