POWER VACUUM - UPDATE
Plans afoot to fill engineer gap as Pravin Gordhan confirms Eskom board will be reconstituted
The Eskom board will be restructured, Pravin Gordhan has confirmed. This follows reports that President Cyril Ramaphosa was said to be planning changes to the management and board of Eskom, and experts say it is essential that skilled engineers be appointed to the board.
South Africa is buckling through its worst year of energy availability, but the Eskom board does not have a single electrical engineer on it. As the Presidency and Public Enterprises Minister Pravin Gordhan prime the country for changes, the board could be in for a big sweep.
On Tuesday, News24 reported that Gordhan had written to the six non-executive Eskom directors, alerting them to board changes.
In a statement later on Tuesday, Gordhan confirmed that the board would be reconstructed and reconstituted. “The Minister informed the board that a review has been finalised and that the Board will soon be reconstituted and restructured. The Board members will be informed of the outcome of the process.,” said the statement.
Our graphic shows that none of the eight current directors has operational electricity experience and that none is an electrical engineer. Does it matter?
“It’s absolutely necessary,” says Parmi Natesan, the CEO of the Institute of Directors. “Industry knowledge and technical proficiency [are] important,” she says, pointing out that one of the reasons for African Bank’s failure in 2014 was that its board composition did not have the requisite skills.
Natesan says that while a company’s operations are the purview of its management, it is still essential to have the requisite skills. “[The directors] may not necessarily have run a company,” says Natesan, “but they need to know the sector.”
Workers inside the control room at the Eskom Holdings Lethabo coal-fired power station in Vereeniging, South Africa, on 5 November 2021. (Photo: Waldo Swiegers / Bloomberg via Getty Images)
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The Eskom board is chaired by the molecular immunologist and former UKZN vice-chancellor Malegapuru William Makgoba. Rod Crompton has long policymaking experience in energy but has not been at the coalface of electricity delivery. He was a regulator with the National Energy Regulator of SA (Nersa). The closest the board gets to requisite skills is Pulane Elsie Molokwane, a former senior nuclear physicist at the pebble bed modular reactor project.
The CEO, André de Ruyter, has a good executive pedigree and earned his stripes at Nampak. He spent 20 years in coal, gas and coal plant operations at Sasol, in South Africa, China, Germany and the Netherlands.
The CFO, Calib Cassim, is a long-timer at Eskom, but he is a money man, not an engineer.
Eskom is an engineering company that runs power plants, and it does not have a director who understands its core business, says an industry expert. Those plants are in crisis, and the board needs directors who can speak “plant language” to support Eskom’s executive suite, which is being rebuilt after being compromised by State Capture.
Until its capture, Eskom always had one or two electricity utility specialists on its board. But that practice ended under former president Jacob Zuma, whose patrons, the Gupta family, trained their sights on coal supply to Eskom.
Natesan says a blend of skills is essential and that a public-facing company like Eskom needs to keep the public interest in mind — or “what’s good for the country”, she says.
“You can’t overload the board with engineers,” says Professor Lwazi Ngubevana, the director of the African Energy Leadership Centre at the Wits Business School, “but would you have a water board without a water engineer?”
He says a complex utility like Eskom needs a blend of governance, finance and other specialities. Having international expertise on Eskom’s board wouldn’t do any harm. Still, he says, directors brought in from abroad need to have a “developmental state” frame of mind, given the many mandates Eskom has. It is still SA’s majority energy provider, it must electrify areas without power and be a transformation leader.
At the time of writing, half the installed capacity of the grid was still on planned or unplanned outages while the utility was struggling to buy diesel, given the escalating energy crisis in Europe. DM
This article was amended to clarify André de Ruyter’s experience with energy. The article was then updated at 2.20 pm with confirmation from Gordhan of imminent board changes.
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Is this board a result of affirmative action?
The results of this board is not affirmative. That’s all I care about.
The “developmental state mindset” is one of the reasons Eskom is in the state it’s in. That is why costs are running away ( aside from corruption, cadre deployment, overmanning, unproductive workforce, incompetent management, government interference, etc …) We need hard-nosed business men and technocrats on the board, if any can be found who would be willing to be associated with the mess.
When will the ANC admit that racist BEE employment policies are killing this country and driving the taxpayer to greener pastures? Until they do, there is no hope for us…we will merely become another useless corrupt African country ( if we aren’t already!)
It’s jobs for pals, the ANC patronage way!
Eskom’s Board needs a few engineers with relevant experience on it, but no commercial, public-service enterprise will succeed with only engineers on its board.
By the way, at CEO Level, Eskom was always run by top-flight engineers, but not necessarily Electricals. Dr Hattingh was electrical, his successor Dr Reinhart Straszacker (’51 – ’80) was mechanical, Jan H Smith Electrical, Ian McRae Mechanical, & Allen Morgan qualified in electrical engineering, appropriate for his focus on the distribution side of the business. What all had in common was DECADES of relevant experience in the field, before earning the top positions.
The problem Eskom has is that the transformation agenda assumes that it (along with any of the other failed SOEs) can be controlled and managed by a Board almost totally devoid of deep experience of that business-which is technical and financial. Eskom is not a parliament. Eskom’s Board has been passing on political instructions to operational management with one or two men trying to stick up a hand to fend off political calls. Hats off to those few who have been able to bypass the call to bridge out safeties and stop the ‘trips’. Because it is very close to that.
I agree that Eskom needs “skilled engineers” on its board, but a word of caution is necessary. Many people say that they are engineers, but unless they are registered as professional Engineers with the Engineering Council of South Africa, they should not be considered. There are technologists and technicians who pass themselves off as engineers, but they are not competent to address complex engineering matters. It is much like having a nurse and not a doctor specialist carrying out your heart transplant procedure.
Many very competent and highly experienced engineers are not registered with ECSA. I’m one of them. My work as a consultant doesn’t require registration, and the huge mountain of paperwork necessary is a major pain in the bum. And of course, there is the expense of annual membership and keeping one’s CPD points high enough.
ECSA isn’t the only way of identifying a competent engineer. Membership of the appropriate Learned Society (or “Voluntary Association”) as the Act calls them is a good indication, if the person is graded above the entry level.
Besides engineers, I propose one member for the new board to be an ex Scorpion to manage the Security aspects and get to the bottom of all the corruption and sabotage. That will give de Ruyter and Oberholtzer some breathing space.
What a fantastic suggestion! Imagine the panic at the disco if this were to be floated…
This is a good suggestion.
Here are my ha’penny’s worth of nominations for Directors of Eskom Board:
Dave Nicholls, Anton Eberhard / Chris Yelland; Mark Lamberti, Bobby Godsell, Mick Davis, Peter Prozesky.
Somehow, I doubt that the ANC cabinet would appoint a single one of them to any SOC. If Minister Khumbudzo Ntshavheni had any say, I’m sure she would black-ball every one of them !
If Eskom was one of five or ten energy companies, rather than a state owned monopoly, it would have to adapt or die. The “comfortable position” provided by the monopoly is the major issue. Simply deregulate FAST!
There is a very definite trend which is accelerating. If this continues cannot see the ANC getting even 20% of the 2024 vote, which will take place in the dark. Well done ANC for eventually destroying South Africa and creating yet one more failed African state.
And while you’re about it, you may find it useful to appoint engineers as power station managers, and people in charge of maintenance.