Eskom chiefs put on ice by gatvol board
Deputy President Cyril Ramaphosa and Public Enterprises Minister Lynne Brown pulled the plug on Eskom’s top four executives this week.
Frustration over Eskom’s confused and confusing response to its electricity generation and cash-flow crises led to the Cabinet “war room” and the utility’s board suspending Eskom’s chief executive and his three key lieutenants.
Ramaphosa and Brown drove the drastic move to suspend the four to clear the way for an independent inquiry into the utility, many sources have confirmed.
Ramaphosa is in charge of the war room that the Cabinet set up in December to try to turn the troubled Eskom around, and Brown is the government’s shareholder representative in Eskom.
The war room comprises ministers, directors general and officials from public enterprises, energy, the treasury and co-operative governance and traditional affairs.
A well-placed war room source said Ramaphosa and Brown finally lost patience with “the quality of the information the war room has been receiving from Eskom”.
“You’re kind of in the dark,” said the well-placed source, who asked not be identified. “You depend on the Eskom board and executive, but the information they give you is just not credible. One day you’ll be told one thing, the next day another.
“We don’t know how to react, because the information changes the whole time.”
Eskom board chairperson Zola Tsotsi made the dramatic announcement about the suspensions on Thursday, and named the suspended quartet as the chief executive, Tshediso Matona, the finance director, Tsholofelo Molefe, the head of group capital, Dan Marokane, and the head of technology and commercial, Matshela Koko.
In a statement released shortly afterwards, Brown said she had met the board on Wednesday evening and expressed her “concerns, fears and frustration” on a raft of issues.
These included “the instability at power plants; the financial liquidity of the utility; the lack of credible information; the unreliable supply of electricity and its dire impact on our economy; progress with the build programme; overruns at Medupi and Kusile; delays of the investigation into incidents at Majuba and Duvha; and the issue of coal and diesel pricing”.
Eskom sources at board and executive level said Molefe and Marokane had raised the ire of the war room for their handling and communication of Eskom’s financial problems, as had Koko for the utility’s new build, maintenance and procurement problems.
Matona, who has only been chief executive for six months, was also suspended because he had apparently failed to demonstrate decisive leadership, including guiding his executives, said the sources.
The war room source warned that Tsotsi had been lucky to escape the chop. “He’s presided over Eskom for more than four years now and is on very shaky ground. If this exercise fails, his head will roll.”
An Eskom executive confirmed that the war room had finally lost patience with the executives. “Since December, it has had enough time now to see what is and isn’t working at Eskom, and they have been endlessly frustrated by Eskom’s response, and these four executives in particular,” they said.
A source on the Eskom board said Ramaphosa’s office had settled on a co-ordinator for the external inquiry before talks of a shake-up at the power utility started on Monday.
“Blowing a gasket”
Eskom’s executives met on Monday and Tuesday this week for a strategic planning session.
The war room was waiting for an update from this session, but the first sign that something was amiss was when a media briefing by Brown about the war room’s progress was scheduled – then cancelled – on Tuesday.
The Eskom board met on Wednesday, with Brown in attendance.
According to a source with knowledge of the meeting, the two executive board members – Matona and Molefe – were asked to leave, after which Brown “blew a gasket” and demanded that the board take decisive action.
After she left, the board resolved to suspend Matona and his fellow executives to make way for the inquiry.
Tsotsi called a hastily arranged press conference on Thursday morning, at which he announced the inquiry and suspensions.
Hinting at why the executives were suspended, Tsotsi said the inquiry “will be given unfettered rights of access to all information deemed necessary for this probe to be successful”.
This chimes with the war room source’s explanation that the quality of information from Eskom had been a problem.
Details of the inquiry’s composition are still sketchy, but a board source told the Mail & Guardian that Ramaphosa’s office had appointed a co-ordinator even before talks of a shake-up at the power utility started on Monday.
Nick Linnell, a business turnaround consultant, confirmed on Thursday that he had been appointed to the role.
He declined to comment further.
Spokespersons for Ramaphosa, Brown and Eskom were all unavailable at short notice.
Lionel Faull is an investigator with amaBhungane, the M&G Centre for Investigative Journalism