DOCUMENTS

Eskom: Radical shift in approach needed – Natasha Mazzone

DA MP says with over 48 000 employees, salary costs are spiralling out of control and becoming unsustainable

Eskom needs to change tack to bring stability and growth

24 July 2018

The release of Eskom’s financials on Monday painted a dire picture of the state of affairs at the power utility. The new board, Chairman and CEO who have recently taken over the reins, need to show a radical shift in approach if they are to have any hope of turning the failing entity around. It can never be business as usual at Eskom.

The Minister of Public Enterprises, Pravin Gordhan, and Eskom executives need to stand firm and not waiver with a no-nonsense approach to Eskom. Currently, Eskom is bloated and inefficient. With over 48 000 employees, salary costs are spiralling out of control and becoming unsustainable.

An area which has contributed to the stagnation at Eskom is the lack of accountability for those who have been implicated in corruption. Eskom executives need to follow through with charges and disciplinary action, as well as reclaiming money from entities and individuals that have spirited away billions from Eskom through corruption and State Capture.

The DA has laid a number of charges against Eskom officials and related parties. These include:

In November 2016 - charges against former CEO, Brian Molefe, for his alleged part in State Capture;

In November 2016 - charges against the Eskom Board and Trillian for their alleged role in corruption;

In March 2017 - charges against former Acting CEO, Matshela Koko, for his alleged role in State Capture;

In July 2017 - charges against former CFO, Anoj Singh, for his alleged role in State Capture; and

In September 2017- charges against Trillian, MckinseyJust Coal and SAP for their alleged roles in corrupt activities at Eskom

We encourage Eskom to file supplementary affidavits to support our charges if they are serious about cleaning up the power utility

Further to this, the DA is currently in the process of drafting a Private Members Bill which will see Eskom being broken up into two separate entities: a transmission public entity, which will manage the entire grid and transmission lines, and a generating entity which will be privatised. This will create space for energy companies to compete with Eskom on an equal footing and it will improve the performance and efficiency of the sector.

The DA also calls on Minister Gordhan to consult the Auditor-General and provide a concrete plan with regards to reducing irregular expenditure at the entity. With over R19 billion in irregular expenditure, Eskom is on a collision course with investors and financiers.

Eskom is in this dismal state due to years of corruption, financial mismanagement and compromised Ministerial oversight. The task to turnaround the entity is enormous but urgent if we are to move the economy forward.

With 9.5 million people unemployed, the economy needs a well-functioning and efficient energy sector to stimulate job creation. The DA will continue to explore every avenue to ensure that South Africa has an efficient and transparent Eskom.

Issued by Natasha MazzoneDA Shadow Minister of Public Enterprises, 24 July 2018