New Eskom CEO Dan Marokane deserves our highest honour for bravery. Putting up his hand to run one of our most dysfunctional institutions is worthy of recognition and might be the only success he will achieve at Eskom.
A successfully reformed energy sector is one where Eskom has no new customers for its electricity. Most users will be on renewables and selling their surplus to the grid. Achieving this level of reform will be miraculous, as there are too many chefs in Pretoria responsible for energy, and each has his preferred route to the New Jerusalem.
The finance minister, Enoch Godongwana, is not among those chefs, he is simply the man with a purse with too many holes. Yet his approach is exciting. He does not see why people have been trying to fix Eskom for two decades instead of diversifying the energy sector to achieve energy security.
Pravin Gordhan, the minister of public enterprises, is the main chef responsible for the utility and his views may not differ from Godongwana’s regarding the need to reform the energy sector. In 2019, Gordhan released the “Roadmap for Eskom in a reformed electricity supply industry”.
What is predictable about ANC leaders is the way they run state-owned enterprises, which is straight into the ground
It is the blueprint for splitting Eskom into three entities — transmission, distribution and generation — and creating a much leaner holding company.
Ironically, South Africa experienced stage 6 load-shedding for the first time on the first anniversary of the publication of the roadmap — as if to signify a landmark in the non-implementation of ideas.
Eskom is posting losses of R20bn a year and stage 6 is as prevalent as E. coli off Durban’s beaches.
Marokane is the second permanent CEO at Eskom since Gordhan took over the portfolio in 2018, and the utility is on its third board chair since then. Marokane is the 11th CEO in a decade.
The other chefs are Gwede Mantashe, the minister of mineral resources & energy, and Kgosientsho Ramokgopa, minister of electricity.
Figuring out who his line minister is will be an exciting exercise for Marokane; although he will be familiar with the set-up, having been at Eskom before. He was one of the executives driven out of Eskom by state capturers in 2015. On his return, he will find that the entity has been denuded of engineering capacity.
He may also operate in a new shareholder set-up after the elections next year. Ordinarily, people such as Mantashe and Gordhan should retire. The two may need help getting on the ANC list of parliamentarians. Cabinet ministers must by law be MPs, though the president is allowed to appoint two from outside parliament. Dropping Mantashe and Gordhan will require Ramaphosa to do the thing he is biologically incapable of doing: make a decision.
In the absence of Mantashe and Gordhan, Ramokgopa would be the front-runner to run the energy portfolio on his own. But that assumes an improbable scenario in which the ANC wins a simple majority and runs the government alone. We will likely have an ANC-led coalition in charge, so forming a cabinet will require horse-trading.
While Gordhan and Mantashe should take serious blame for the slow pace of reforms, we are unlikely to enter a changed era of fast-paced, predictable decisions any time soon.
What is predictable about ANC leaders is the way they run state-owned enterprises, which is straight into the ground. Those are Marokane’s bosses, and they have yet to allow a single credible executive to run an SOE successfully — besides the utterly unusual case of Telkom, which was listed on the JSE.
Our energy picture should start looking better in the next two years, but Eskom itself is in a tricky situation. It was given a breather early this year when the National Treasury took R254bn of its debt, but how will the utility take advantage of this respite? There is a real risk that nothing different will be done, and Eskom will find itself in yet another financial mess.
It would then require further recapitalisation by the government. Eskom’s operational and financial health would be worse, and as time goes by it will lose direct customers for the electricity it generates. It would still have the political burden of providing electricity for a largely poor and middle-income customer base, without hiking prices. This is the future Marokane has signed up for.
• Mkokeli is lead partner at Mkokeli Advisory, a public affairs consultancy.
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