Former Eskom CEO breaks down 'culture of maintenance deferral'
On Tuesday’s parliamentary inquiry into Eskom, the former Eskom chief executive Tshediso Matona revealed how despite cash injections to keep power plants running, Eskom had instituted a culture of deferred maintenance on its power plants.
Load-shedding and cash injections
In 2014, Eskom’s finances became a concern because of early signs of economic slowdown with several issues regarding tariffs and challenges around debt collection.
Matona, who was director general of public enterprises at the time, said that as his department was a shareholder in Eskom, it got involved in the issue.
It was around this time, with the support of National Energy Regulator of South Africa and the treasury, that Eskom would be given a financial injection to the tune of R23-billion, Motana explained.
“That package included the conversion of a loan to equity. That seemed to deal with the financial challenges.”
But, Motana said, “New challenges emerged to supply electricity without interruptions” as load-shedding began.
So when Matona became chief executive of Eskom at the end of 2014, Eskom’s revenue was under pressure and load-shedding had intensified.
“Operational performance is the responsibility of the company,” Matona said. “We embarked on a number of strategies to solve that problem.”
Culture of Maintenance Deferral
Matona only served as Eskom chief executive for seven months, but he said that he stopped the culture of maintenance deferral that Eskom had become accustomed too.
“The big problem that accounted for generation and supply was the breakdown of the units at Eskom. They were simply tired,” said Matona.
He explained that when he arrived at Eskom in 2014 that a decision had been made to defer maintenance for plants because of the 2010 World Cup. Then, Matona explained, upcoming local elections had led to another deferral of maintenance.
Although Matona’s successor Brian Molefe was lauded for his plant maintenance programme, Matona insisted that it was through his hard work that he had reinstated a discipline of maintenance, guaranteeing the programme’s success.
‘Bugged’ Eskom boardrooms
“Developments within the company – especially deliberations of the board – were leaking to the media. So, there was a decision that periodically the boardroom would be swept of devices,” said Matona in response to former finance minister Pravin Gordhan’s questions on an Eskom board meeting on March 11 2015.
Matona said that he twice swept the Eskom boardroom for listening devices..
Overspending to keep the lights on
During the peak of Eskom’s load-shedding, the power utility spent R1-billion a month on diesel contracts to keep lights on. Montana who was chief executive at the time said the procurement was a “contested issue” and “It illustrated the basic flaws of procurement at Eskom”.
“It seemed that emergency situations had been used as a reason to deviate from what normal procurement would be,” said Motona with the reason being that a “quick turnaround” was needed to keep lights on.
However, Motana said that the emergency situation put Eskom at risk because it eliminated tender transparency, which the normal procurement procedure would have prevented.
Only seven months
Matona didn’t fit into the system and said that his removal was “predetermined” by Eskom chairperson Mr Zola Tsotsi.
“That whole interaction was being managed in a manner that would create a defence for the board that it gave me an opportunity to make representations. It was a farce in my view,” said Matona.
Matona’s suspension was based on his refusal “to do certain things” such as keep former acting chief executive Collin Matjila on at Eskom because of allegations against Matjila.
When he attempted to challenge his initial suspension at the Labour Court, his case was sent to the Commission for Conciliation, Mediation and Arbitration (CCMA).
“When things got there, I found that the Eskom board had excluded any possibility of my return as an outcome of that arbitration. In fact, I was made an offer to leave the company.”
Matona said that he chose to walk away and “leave that sorry and sordid episode” behind him.