Thulane Gcabashe possesses the modesty to realise that being CEO of a company such as Eskom merely offers a chance to make a small contribution to a phenomenally huge project.
He is about to lead Eskom into what he calls ‘a new era of growth” in the form of a R93-billion capital expansion phase, which, he readily admits, ‘will never be completed in my time”.
Short-term aspects of the project include recommissioning mothballed power stations — a process that is under way in Camden, Mpumalanga and will be undertaken in Grootvlei.
He will also oversee the establishment of two kerosene-powered open-cycle gas turbines on the West Coast, an exercise that will be complemented by the Department of Minerals and Energy establishing similar facilities in the Eastern Cape and KwaZulu-Natal. All of this is in response to the higher than anticipated growth in demand, which will see excess capacity run out in 2007.
The longer-term aspect of the project involves building facilities such as storage for pumps, a process that takes up to seven years — an aspect that Gcabashe concedes is out of his reach.
Yet, he will derive satisfaction from getting Eskom to its current position. This week Gcabashe delivered ‘electrifying” results for the 15 months to March with revenue at R43-billion and a profit of R5-billion, up from R3,4-billion. Group assets stand at R109-billion and, with a gearing of 0,18, the utility is well positioned to approach local and international markets to meet its borrowing requirements for its expansion programme.
Eskom paid a dividend of R1,3-billion, its third and highest to date, much to the delight of the Minister of Public Enterprises, Alec Erwin.
The utility embarked on a strategy to diversify its investments in 1999. When this was reviewed in 2003, it became apparent that the higher than anticipated growth in core business required more focus. Now the company will house its new building and maintenance work in subsidiary Eskom Enterprises. But Eskom Enterprises also houses a 15% stake for the second national operator (SNO), where spending was put on hold at R784-million just more than a year ago.
But surely taking on Telkom while building new power stations will distract management?
‘We will withdraw from the SNO at the right time,” Gcabashe says, noting that Eskom’s interest is to ensure that the SNO gets off the ground.
The intention to withdraw from non-core assets will see Eskom dilute its holding in the pebble bed molecular reactor (PBMR) and move from developer to customer. Gcabashe would not be drawn into whether there was sufficient political space for South Africa to explore nuclear energy as an option. ‘All I can say is that globally there is a re-look at nuclear [energy].”
Gcabashe has held the top job since November 2000, before which he was joint deputy CEO with respected businessman Bongani Khumalo.
He describes the job as ‘exciting, challenging and rewarding” in many ways. As an example he cites Mozambique — a country that has emerged from a war and built a world-class smelter (Mozal), largely because of Eskom’s cheap electricity.
He is also fulfilled when he visits a newly electrified area and sees excitement in people’s faces. The experience embodies Eskom slogan ‘with energy, anything is possible”.
It is this ability to change lives that first won his interest in Eskom’s rural electrification programmes in 1992. It meant leaving a post as a partner in a town planning consultancy that worked in rural areas. ‘In rural areas, there are a lot of ideas about what needs to be done,” he says in an unintended swipe at NGOs. ‘But when it comes to action, very little is done.”
This charismatic Waterford high graduate is on a three-year contract, which, as top posts go, will most likely signal an end to his tenure. But what lies beyond running Eskom?
‘I have never run a potato farm,” he says. ‘I might want to try that.” Seriously though, ‘there is a lot of potential in under-serviced areas, here and elsewhere in the world”.