/ 3 November 2022

Eskom board will decide De Ruyter’s future, says Ramaphosa

On the fence: Cyril Ramaphosa says a state capture inquiry should simultaneously be broad and focused. Lulama Zenzile/Die Burger/Gallo
President Cyril Ramaphosa. (Lulama Zenzile/Die Burger/Gallo)

President Cyril Ramaphosa says Eskom chief executive André de Ruyter’s job is safe — for now — and it is the state-owned entity’s board that will decide whether he stays or goes.

And although there is an “aspirational wish” for the government to pick up municipalities’ debts to Eskom, they, government departments and entities and ordinary consumers needed to pay for the electricity they used.

In his final answers to written questions for the year in the national assembly on Thursday, Ramaphosa said the new Eskom board — appointed in September — was carrying out performance assessments of all its management and its power stations, as part of the process of stabilising the entity.

In response to a question from Economic Freedom Fighters (EFF) president Julius Malema as to when De Ruyter would be fired over worsening load-shedding, Ramaphosa said any decisions to remove executives would be based on “a process”.

De Ruyter and Minister of Public Enterprises Pravin Gordhan have been coming under increasing fire over Eskom’s poor performance from both the EFF and Ramaphosa’s critics in the ANC, who have been demanding their dismissal for the latest wave of rolling blackouts.

Ramaphosa said the board should be given the time and space to do its work, after which it would report to the shareholder — Gordhan — as to its course of action with regards to management.

“The new board has the skills, experience and the expertise to undertake a thorough assessment of Eskom, and executive leadership at Eskom, and take whatever steps they consider necessary to address areas of weakness. They must be given the space to do so,” Ramaphosa said.

The board would be given time to “assess what needs to be done to improve the effectiveness of the generation plan and the effectiveness of management and operations at all levels”.

“No state entity has had as many CEOs as Eskom — more than 15 or close to 20 in 28 years of democracy,” he said.

Ramaphosa said a multi-disciplinary revenue committee had been set up to coordinate collection of debt from municipalities, which owed about R50-billion for services.

“We have made it clear that non-payment for services is unacceptable and have taken a number of steps to ensure that payment of these debts is recovered,” he said.

The country would continue to build generation capacity by taking on a diverse mix of energy sources, including coal, solar, hydro-electric power and wind and by involving the private sector to complement Eskom’s capacity.

Eskom was focusing on the maintenance and refurbishment of six power stations, while at the same time addressing sabotage and fraud, which had disrupted the operation of a number of power stations.

Improved revenue collection and cutting debt to Eskom would allow the entity to play its role in implementing a just energy transition through a mixed energy plan, which would also help to address load-shedding.

In response to questions from the Freedom Front Plus’s  Piet Groenewald, Ramaphosa said that affirmative action and broad-based black economic empowerment policies (BBEE), which had been put in place to address imbalances created by apartheid, would remain in place.

Ramaphosa said there had been progress in enabling the participation of black people in the economy, “the effect of progress has not yet been felt by all South Africans”.

As a result, there was still a need for policies that would simultaneously address historical imbalances created by apartheid misrule while stimulating economic growth by opening up the economy.

“In this generation, I do not know many black people who have inherited wealth from their parents, yet on the white side in this country nearly every person has inherited something from their parents. Poverty is what our people have inherited, from generation to generation to generation,” Ramaphosa said.

“These policies are intended to ensure that black people do have a meaningful stake in the economy of their country and are able to pass on something other than poverty to the next generation.”

Ramaphosa said that BEE was “not the enemy of merit” and that the two were “not mutually exclusive”.

In response to questions from Democratic Alliance leader John Steenhuisen about the withdrawal of the ministerial handbook, which had proposed lifting the R5 000 a month cap of free electricity and water and other new perks for cabinet members, Ramaphosa said a “process of reconciling these amounts” had been underway at the time it was canned.

Ramaphosa said he favoured having the benefits for cabinet determined by an independent panel — as was the case with the pegging of salaries for public representatives — rather than by the government.

“All of us who determine these benefits are essentially insiders and there is a need for an independent body to examine all these,” he said.

Ramaphosa said they needed a process that would lead to “a measure of equity and fairness, not only to the people, but also to the incumbents”.

Ramaphosa told MPs that the details of the SAA sale to the Takitso consortium — which was currently before the courts and the Competition Commission — would be made public.

“We do need to put various cards on the table so that the people of our country can understand [the sale] and also understand what its future is going to be. We will need to get to the point where we will be able to outline more fully exactly what the terms of the transaction are.”

Ramaphosa said that SAA had been “totally bankrupt” at the time of the sale and did not own any of the aircraft it used as these were leased.

While people thought there was “something funny that is happening”, they needed to understand that SAA was “in a mess” and only had value because of the routes it held.

“Those are some of the facts that need to be put on the table so that everyone gets to understand that without this transaction, SAA would go into liquidation.”