/ 9 November 2009

Eskom saga a ‘complete disaster’

The latest developments at Eskom are a ”complete disaster”, analyst Adam Habib said after Eskom chairperson Bobby Godsell resigned on Monday and CEO Jacob Maroga returned to work after his own apparent recent resignation.

”Now we’ve clearly got a public crisis at the level of Eskom,” said Habib, deputy vice-chancellor of research at the University of Johannesburg.

”Now they are under the scrutiny of national and international media.”

He said that even if there was no political intervention, as speculated, Monday’s developments created this perception after the African National Congress Youth League’s insistence that Maroga had not resigned.

”It’s hard to figure out what’s going on. Clearly there was a dispute between Godsell and Maroga, and the CEO seems to have taken precedence.”

He said that either the chairperson of the board made the announcement of Maroga’s resignation without a mandate, or he had a mandate and then the board acted against him, or the board was overridden by a higher authority.

”I don’t know which scenario is accurate. We have got a disaster on our hands — you cannot continue with crisis after crisis after crisis in public institutions.”

He cautioned against blaming the race question for the controversy, saying that Godsell was liked within the ANC and the labour movement.

”I think it is quite a big blow that Godsell has resigned,” said Investment Solutions economist Chris Hart.

”It appears as though the authority of the board is being undermined. The corporate governance at Eskom seems to have been rocked very badly.”

Godsell announced to Eskom staffers on Thursday that Maroga had resigned but, shortly after that, Godsell called off a media briefing on the matter.

Confusion reigned when the ANCYL said Maroga had not quit, until Eskom told the South African Press Association on Monday morning that Maroga was indeed still at the helm of the state utility. At about the same time, public enterprises spokesperson Ayanda Shezi confirmed Godsell had resigned.

Kruger International economist Ulrich Joubert said: ”The implication is that there was some political intervention … it will be a serious pity if this is the case.

”It would raise a few eyebrows in the investment world. Normally, financial markets do not like political intervention.”

The Star reported on Monday that President Jacob Zuma had met with Godsell on Sunday afternoon, in an apparent departure from his stance not to interfere in state enterprises.

Public Enterprises Minister Barbara Hogan last week denied Zuma had interfered in the Maroga saga.

Earlier this year, the Presidency distanced itself from a bid by Transnet executive Siyabonga Gama to get his job back.

”The governance of state enterprises as a whole may well have been affected badly [by Godsell’s resignation]. It appears as though the authority structures have been usurped,” Hart said.

”Where you have a board that reports to Cabinet, that is accountable to Parliament, that kind of authority structure seems to have been undermined.

”We are not receiving credible explanations for this. It seems the board has been paralysed by the machinations of the past few weeks,” said Hart.

Shezi could not say by 3pm on Monday afternoon whether the rest of the Eskom board had also quit.

Vytjie Mentor, the chairperson of Parliament’s public enterprises committee, on Friday criticised the board’s handling of the matter.

Maroga has been head of Eskom in turbulent times marked by rolling blackouts, coal procurement shortages and record-high electricity tariff increases. — Sapa