Blow as Eskom loses two top executives

Two senior Eskom executives have resigned dealing a blow to the troubled state utility’s already overburdened executive committee. (Gallo)

Two senior Eskom executives have resigned dealing a blow to the troubled state utility’s already overburdened executive committee. (Gallo)

Two senior Eskom executives have resigned dealing a blow to the troubled state utility’s already overburdened executive committee. The announcement comes just before the new chief executive takes his place.

In a notice circulated to staff on Tuesday, Eskom acting chief executive Collin Matjila said both Steve Lennon, group executive sustainability, and Erica Johnson, group executive enterprise development and acting group executive of customer services, would be leaving the company.

The notice said Johnson had resigned and her last day would be on October 31 2014, while Lennon “would also be leaving Eskom” at the end of March 2015.

Lennon had joined Eskom in 1983 and Johnson has been with the utility since 1994.

“On behalf of the executive management committee and all Eskom guardians, I would like to thank them all for their contributions and wish them well on the future endeavors,” Matjila wrote.

‘Gigaba rejected its preferred candidate
The two resignations mean two experienced executives, in charge of three portfolios, will exit the company adding pressure to the thin executive committee.

The exco consists of nine executives, in charge of 11 portfolios – five of which are currently being handled in an acting capacity.

Eskom spokesperson Andrew Etzinger confirmed to the Mail & Guardian that such a notice had been circulated but could not comment on the reasons for resignation of the Eskom veterans.

In April this year the Business Day reported that Lennon, not Matjila, had been the original choice for interim chief executive position – “but the board opted for him after [now former] Public Enterprises Minister Malusi Gigaba rejected its preferred candidate,” the paper reported. “The board had wanted to bring in Eskom executive Steve Lennon, head of the renewable energy division, a month before Brian Dames’ departure, said several sources at Eskom and in the energy sector. Eventually, the board decided that it was preferable to have a caretaker who was not a possible applicant for the post.”

The Financial Mail has mentioned both Johnson and Lennon in an article speculating who former chief executive Brian Dames’s successor might be.

Responding to concerns about Matjila’s appointment, as reported again by Business Day, Eskom chairperson Zola Tsotsi said, “Mr Matjila was a unanimous decision by the board, based on his deep knowledge of and experience in the South African electricity industry emanating from his previous role as chairman of the National Energy Regulator of South Africa and from his current role as Eskom board member.”

Subsequently, in August, Public Enterprises Minister Lynne Brown announced Tshediso Matona, director general of the department of public enterprises, had been appointed to the position of chief executive of Eskom.

Asked whether the above matter has been a reason for Lennon’s resignation, Etzinger said: “I can’t comment on the reasons, it would best to ask Dr Lennon directly, but that is not my understanding.”

Nuclear power plants procurement
The news of the resignations comes a day after the department of energy announced that on the margins of the 58th session of the International Atomic Energy Agency General Conference in Vienna, the Russian Federation and the Republic of South Africa signed an Intergovernmental Agreement on Strategic Partnership and Co-operation in Nuclear Energy and Industry. 

This, the department’s statement said, lays the foundation for the large-scale nuclear power plants procurement and development programme of South Africa which, it is estimated, could be worth more than R1.4-trillion. 

It has however recently become clear Eskom will not be involved in any nuclear procurement.

Eskom has become increasingly more troubled and this year it emerged the utility faced a funding gap of at least R50-billion and just last week the National Treasury announced it has approved a support package.

“Eskom is facing significant challenges that threaten its sustainability. These include a funding gap that requires closing to ensure security of supply,” the treasury said in a statement. “The main contributors to this gap include the fact that Eskom will not be generating enough revenues to cover the costs of electricity supply. Further, Eskom has been incurring additional costs to keep the lights on by running the more expensive power plants [open cycle gas turbines] excessively due to a deterioration of performance of some of its coal plants and delays in the build program.”

‘I’m ready for a change’
Speaking to the M&G from New York, Lennon said that, although the announcement had been made now, discussions about his resignation had started early in the year. 

“It’s personal plans I’ve had for long time. I’m ready for a change,” he said, adding he would explore new horizons but could not divulge further detail. Asked if his resignation was in any way connected to Matjila being selected as acting chief executive over him Lennon said: “I’d rather not comment.” 

Lennon said he had no bad taste left in his mouth from his time at the utility. “I’ve had a great time at Eskom and I intend to spend the next six months or so with the new chief executive”. He said he felt the organisation needed some new blood, however “there is a whole lot of institutional memory that I have, and I’ve told Eskom I will be available to them in future”. 

Lennon said Eskom had a depth of management capacity to draw on. “I think you will see, one of the reasons why there have been so many acting positions, because of the leadership. The organisation wants to give the new chief executive an opportunity to forge his own team. He comes in in a week, so I’m pretty sure you will that stabilising very quickly.”

The M&G’s attempts to reach Johnson on her cellphone were unsuccessful. 

Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn

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