stakes
Mungo Soggot
Two ministers are investigating the conflict of interest arising from the chair of Eskom’s material stake in a company contracted to South Africa’s nuclear programme.
The Mail & Guardian reported last week that Eskom’s chair, Reuel Khoza, is also the founding chair of an investment holding company that has a 29% stake in a group Eskom is paying to develop a nuclear power project. Khoza sits on Eskom’s nuclear oversight committee. He has been non- executive chair of Eskom since 1997, and spends most of his time running Co- ordinated Network Investments (CNI). The research company in which CNI has a 29% stake is called Integrated Systems Technology (IST).
This week, Minister of Public Enterprises Jeff Radebe and the Minister of Minerals and Energy Phumzile Mlambo- Ngcuka asked Khoza to brief them on his interest in IST. Mlambo-Ngcuka said Khoza had written to her this week explaining the situation, and that she would now consult with Radebe on what action to take. Radebe’s office said it had also sought from Khoza a further briefing on the nuclear project – a “pebble-bed reactor”.
The project attracted controversy even before it emerged that Khoza had an interest in IST, one of the main beneficiaries of the R90-million Eskom has spent researching and developing the reactor. Critics of the project complained that the expenditure of so much money before Eskom secures the government’s approval for the new plant is likely to allow Eskom to steamroller the government into authorising the venture.
Khoza denied last week he was involved in a conflict of interest, saying he had no control of the day-to-day running of Eskom. He said he felt he could make impartial decisions while sitting on the nuclear oversight committee.
Khoza added that he had disclosed all his outside interests to Eskom and the government, and that it was up to them to decide whether he should recuse himself from anything to do with Eskom’s nuclear programme or step down.
Professor Mark Ward at the Wits Business School said the onus was on Khosa to know when to recuse himself from decisions or step down. “But the government also has the responsibility to take more decisive action when disclosures are insufficient.”