Not many former chief executives stay on at their old haunts once a successor is appointed and they’re no longer on the board. Thulani Gcabashe, however, can still be found in the corridors of Eskom’s cavernous Megawatt Park — even though he no longer works at the utility.
It’s not homesickness that keeps him here. The former chief executive stayed on as a special adviser to the office of the chairperson, where he coordinates policy between Eskom, the Nuclear Energy Corporation of South Africa, the pebble-bed modular reactor (PBMR) and the government. “I was an employee until December,” he says. “I’m finishing my assignment in what you could call a consulting capacity.”
Gcabashe headed Eskom between 2000 and May last year when he stepped down to make way for successor Jacob Maroga. “A tenure of six to seven years is just about right for CEOs. And this was a very big job, running a huge entity, so that amount of time seemed right. Most of my predecessors have also stayed in office for the same amount of time.”
Though he made a good impression when in office, he also presided over a crucial time for Eskom — the years when the present power crisis could have been mitigated or staved off altogether.
Policy in those days, he says, must be seen in the context of the restructuring of the industry. The energy White Paper of 1998 gave clear direction that competition was to be introduced and that the distribution and generation businesses should be unbundled.
“Certain decisions were taken that were meant to facilitate the restructuring. In hindsight they were not the right ones, but they were taken in the effort of moving forward with restructuring. As to assigning blame, I wouldn’t want to do that. If we had been in a different context, I think the kinds of decisions taken might have been different,” he says.
It has been argued that Gcabashe was placed in an untenable position. He was heading the only organisation that foresaw the impending power crisis and his hands were tied by the state’s refusal to act, apparently under the guise of waiting for private investment. Should Eskom have been more vocal about the crisis? Probably. Perhaps the political climate meant the government would not have taken kindly to repeated lobbying. The price of a new power station at that stage — R50-billion — was being spent on arms.
But what does seem likely is that the coal shortage which underlies the current electricity crisis had its seeds in those years. The M&G has documented the role of Eskom’s procurement policy, which favoured small black companies, in last month’s meltdown.
Gcabashe is reluctant to discuss this. “I’m not running the company any more,” he says. “BEE [black economic empowerment] is a reality and an imperative. For any procurement, therefore, you have to look at opportunities for procurement.”
Since May last year, when Maroga took over, Gcabashe has researched strategy for local manufacturing support, in the hope that South African companies can take advantage of a massive expansion in energy generation.
In the next 20 years, he and his team estimate that as much as R1,3-trillion could be spent on power stations, transmission lines and other generation equipment. The idea is to leverage some of that spend to allow the private sector to contribute.
His role is to offer a strategy for planning and coordination of government support to private companies.
“We’ve modelled a few scenarios and the best case is that 80% could be spent [locally] on average in some areas,” he says. “But averages are very dangerous and there is a wide range of technologies. Once we have the proposal, the numbers change. I cannot speak for government [as to what forms support might take]. When we do come out with the proposal, it will also cover those aspects.”
The last time South Africa undertook a construction programme like the one Eskom has now embarked on was in the late 1970s and early 1980s. “We managed to locate some of those people [who were previously involved] to find out what worked well, and what didn’t work well. The one clear lesson is that they never supplied complete components, but large parts of certain components.”
Gcabashe says the industry required was “quite substantial”, but that it failed because of economic sanctions and lack of market access and because there was no concerted research and development drive.
South Africa now has access to markets. “With this effort, we do know what is sustainable. We’re not doing import-substitution. We want to be globally competitive.”
The potential obstacles? “Skills are an obvious one, but challenges are there for us to deal with them. If you want to have a research and development programme, you need to have a sustainable training programme that’s producing PhDs and you also need artisans. So skills are a huge challenge.”
Having joined Eskom 15 years ago, Gcabashe says he does not find moving from the executive floor a strange or demeaning experience. “You can play many roles here, move from division to division. Now I’m running a project.”