Finance minister Enoch Godongwana has added his voice to a growing chorus of alarm over the state of Eskom and the performance of Eskom CEO André de Ruyter, saying that unlike previous CEOs, De Ruyter was given the luxury of taking out generating units for planned maintenance.
But a study has shown that more power cuts have occurred under him than any other CEO, costing the country R120bn during his tenure alone.
A study done by the Council for Scientific and Industrial Research (CSIR) in 2020 shows that load-shedding cost the country R330bn over the past decade. In 2019 — the year De Ruyter was appointed — load-shedding cost SA between R60bn and R120bn, the study shows.
“He was allowed to do planned maintenance the other guys were not allowed to do. We don’t see the results of that planned maintenance, he’s cut us out of electricity doing planned maintenance. The indication is that there’s more blackouts under him than ever, in the midst of a lockdown,” Godongwana said.
It is unusual for a finance minister to weigh in on the poor performance of a strategic state-owned company. Asked if he supports calls for the removal of the Eskom CEO, Godongwana said it is not his place to make such a call.
The minister repeated his earlier assertions that a focus on fixing Eskom over the past 13 years, rather than fixing the grid, was a mistake that had to be corrected.
“One of the things we need to talk about is how do you bring power to the grid,” he said.
As Eskom declared stage 4 load-shedding this week, calls for De Ruyter’s head intensified.
In his medium-term budget policy statement this week, Godongwana commended the recent bid window of the Renewable Energy Independent Power Producer Programme (REIPPP), whose 25 projects will generate more than 2,500MW of electricity at 47.3 cents per kilowatt.
“This is the cheapest rate achieved in the history of the programme and is among the lowest rates achieved worldwide. Over the long term, creating a competitive energy market will help contain costs of generating electricity and support GDP growth,” he told the National Assembly.
You can call for the dismissal of CEO and board all you want, someone still has to come and do the job. That is what [André] De Ruyter is doing now
— Eskom spokesperson Sikonathi Mantshantsha
Eskom announced stage 4 blackouts after explosions at the Medupi and Kendal power stations wiped out 4,000MW.
The power utility’s spokesperson, Sikonathi Mantshantsha, said calling for De Ruyter’s head when he is doing all he can to maintain units and stabilise the grid will not stop load-shedding from occurring.
“André de Ruyter is CEO No 14 since 2007, you can count them all. All of those people have had to step down for one reason or another. The very first CEO who left because of load-shedding was Jacob Maroga in 2007 ... All of his successors have had to leave for one reason or another, main one being load-shedding. Where is load-shedding today? We still have it,” said Mantshantsha.
“You can call for the dismissal of CEO and board all you want, someone still has to come and do the job. That is what De Ruyter is doing now.”
Mantshantsha said Eskom could stop load-shedding tomorrow by bringing back the units it has taken out for planned maintenance, but the entire grid would collapse within a year.
“The fact you have to take out these units means you are actually reducing the amount of availability, and therefore increasing the occurrence of load-shedding. You must have maintenance now in order to buy more reliability in the machines. Each generation unit must be taken down for at least three to four months to do proper maintenance.
“It’s easy to stop load-shedding, just stop maintenance and return all units to service. SA will have more electricity that it needs right now,” he said.
De Ruyter defended himself this week, saying he will not resign of his own accord.
“I don't believe that changing horses at this point, or changing a jockey, would make a difference,” he said.
The National Treasury was particularly scathing about Eskom in its budget review, continuously referring to the “power cuts” being experienced countrywide as a drag on the economy.
“There is profound uncertainty about the durability of the economic recovery, mainly due to renewed volatility in global conditions and the risk of renewed Eskom power cuts,” it said.
But the Treasury was buoyant about energy reforms that will see the threshold for embedded generation increasing from 1MW to 100MW, and independent power producers selling directly to consumers.
“Electricity supply constraints, which could worsen over the short term, are a drag on growth. In contrast, progress on energy reforms poses upside risks to fixed investment and the overall economic outlook.”
The Black Business Council (BBC) was the first to call for the axing of the Eskom CEO.
“The BBC was overly optimistic when De Ruyter was appointed as Eskom needed stability, but has since realised that two years later the country has nothing to show but the most blackouts in the history of our beloved SA,” said CEO Kganki Matabane.
The business body said the current Eskom leadership does not seem to have a handle on the crisis.
“The Eskom leadership is failing the country and, as such, the economic reconstruction and recovery plan, which the president outlined, will remain a pipe dream. The country, which is very understanding and not unreasonably demanding, is looking for a predictable [roster] with a proper and realistic period of when the problem will be finally resolved so that businesses and all residents can plan their lives accordingly.”
The National Union of Mineworkers (NUM) demanded that both the CEO and the board must depart Eskom.
The leadership of De Ruyter has sold South Africans a dead cat ... All we need is leadership that will keep the lights burning
— National Union of Mineworkers
“The leadership of De Ruyter has sold South Africans a dead cat,” the union said.
“They promised that they will resolve the problem of load-shedding in 18 months. They dismally failed to meet their set target. All we need is leadership that will keep the lights burning.”
However, the NUM’s mother federation, Cosatu, said it is too early to ask De Ruyter to step down. It said it wants answers from the power utility before deciding on the fate of its leadership.
“What we are interested to know first is the extent of the problem and what is lacking. Is it the resources or skills? We hope that during this period the management and the board should be able to tell us before we just ask them to leave,” general secretary Bheki Ntshalintshali told eNCA in an interview.
Zwelinzima Vavi, general secretary of trade union federation Saftu, added his voice to calls for De Ruyter and the Eskom leadership to be shown the door.
“They have now failed beyond any reasonable doubt. They are useless. They have proven to every South African that there is no solution that will ever come from their direction, and South Africa is suffering. South Africa is in darkness,” he said.
“As I am speaking to you, I am load-shed; sitting next to the window so that you can at least see my dark face ... no economy can survive this.”
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