POWER CRISIS ANALYSIS
Can new Eskom CEO Dan Marokane fix broken power utility mired in corruption?
Marokane returns to an infinitely more broken Eskom, this time as the power utility’s new CEO. The true test will be whether he is bold enough to push back against political interference, fight corruption at the facility and manage a very complex crisis.
Dan Marokane is the new Eskom CEO, becoming the 11th person in a decade to be appointed to the top job.
A chemical engineer with master’s degrees in petroleum engineering and business administration, Marokane will return to Eskom at the end of March 2024 — ending an almost year-long search for a CEO.
Marokane is no stranger to Eskom, having served as an executive at the power utility from January 2010 to June 2015.
His exit from Eskom was unceremonious. Along with three other executives, he was suspended on 15 March 2015 to make room for people who would collaborate with members of the Gupta family to capture Eskom.
In fact, according to reports of the Zondo Commission of Inquiry, the plan to suspend Marokane and his fellow executives was engineered at the Durban residence of former president Jacob Zuma, a few days before it was executed.
Former Eskom board chair Zola Tsotsi was “at pains” to assure Marokane that “there were no allegations of misconduct against him”, but the board nevertheless went on to institute an independent inquiry into the affairs of the power utility.
This inferred there was no clear or rational reason for suspending Marokane.
However, Tsotsi told him it was necessary to “create a conducive atmosphere that would enable the inquiry to get to the bottom of the issues”.
Marokane (50) initially fought to regain his position at Eskom as head of the group capital division but decided to leave as he felt the relationship between him and the board (led by Tsotsi) had broken down.
He accepted a R6-million settlement and left.
Marokane led the division which oversaw major projects including the construction of the Kusile and Medupi power stations – key sites of State Capture and the fleecing of millions (if not billions) of rands.
Marokane left Eskom four days after the first unit at Medupi was connected to the grid. In his testimony at the Zondo inquiry, Marokane said it was “painful” to be suspended just days after Medupi went online.
Move to Tongaat
From Eskom, Marokane moved to the private sector, joining Tongaat Hulett, the sugar company that imploded under the weight of accounting fraud.
Marokane first joined Tongaat’s sugar division as an executive in January 2018, before the company publicly admitted that its profits were falsified and investors were lied to — much like Steinhoff.
This is what PwC’s forensic team found at Tongaat: “Undesirable accounting practices that resulted, among others, in revenue being recognised in earlier reporting periods than it should have been, and in expenses being inappropriately capitalised to assets.”
Put simply, the financial books were cooked at Tongaat under former CEO Peter Staude.
After PwC completed its probe, Marokane was appointed to Tongaat’s board in November 2019, and, later in February 2023, he became acting CEO of the company.
His exit from Tongaat is being finalised so that he can take on the top job at Eskom next year.
Public Enterprises Minister Pravin Gordhan, who announced the appointment of Marokane at Eskom, praised him for his experience in working in distressed organisations and stepping up to the task of trying to fix Tongaat.
One Johannesburg-based analyst quipped that using Tongaat to demonstrate Marokane’s dexterity “is a bad example considering that the company is a mess and his turnaround efforts are hardly a success story”.
Tongaat has been in business rescue since October 2022. The company is facing a smothering debt of R7-billion and cannot persuade its funders to support its restructuring process. The livelihoods of about 25,000 people, mostly in KwaZulu-Natal, who depend on Tongaat, remain at risk if the company does not turn its financial situation around.
Marokane’s Eskom return
Marokane will return to an even more broken Eskom.
Blackouts, which began in 2008, have worsened, with 2023 being the worst year in terms of the number of days South Africa has been in the dark.
Eskom is loss-making (it posted a record financial loss of R23.9-billion in 2023). More losses are expected.
The government gave Eskom a bailout of R254-billion over three years, with strict conditions, including the power utility embarking on cost-saving measures and not taking up new borrowings.
Eskom wants to run units at its coal-fired power stations beyond their scheduled retirement dates to avert an even bigger electricity supply gap.
Corruption, crime and sabotage are still a big problem at Eskom.
The work to reorganise Eskom into three parts (generation, transmission and distribution) since 2019 has moved at a glacial pace but is gaining momentum.
These are all tasks that will be on Marokane’s to-do list when he walks into Eskom’s headquarters in Sunninghill, Gauteng.
So, is Marokane a good choice for Eskom and does he have the chops to push through much-needed reforms?
Peter Attard Montalto, the managing director of consultancy firm Krutham, reckons that Eskom “ended up with the least bad candidate” in Marokane.
This is because Marokane knows the power utility well, brings institutional memory and will probably be admired by Eskom workers — some of whom he has probably worked with in the past, which is good for morale.
Attard Montalto stressed that a large number of stronger candidates did not apply for the Eskom CEO job, making the pool of choices small.
Other individuals who were considered for the top job include Central Energy Fund chairperson and former Eskom executive Ayanda Noah and Association of Municipal Electricity Utilities special adviser Vally Padayachee.
Marokane is seen as not being more politically connected than other candidates.
The true test will be whether Marokane and the relatively new Eskom board, chaired by Mteto Nyati, are bold enough to push back against political interference and corruption at the facility.
About Marokane’s staying power, Attard Montalto said: “As with previous incumbents, it seems unlikely he would last more than a few years.”
After all, the energy issue is highly complex and political, with five ministers overseeing it. There is Pravin Gordhan (in charge of Eskom’s governance affairs); Mineral Resources and Energy Minister Gwede Mantashe (who has powers to procure additional electricity from coal, nuclear and renewable energy sources); Finance Minister Enoch Godongwana (in charge of funding Eskom’s operations); Minister of Forestry, Fisheries and the Environment Barbara Creecy (in charge of the environmental impact of Eskom’s operations and SA’s decarbonisation plans); and Electricity Minister Kgosientsho Ramokgopa (involved in all functions). DM
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An impossible task while Gordhan and Mantashe are still around…oops make that the ANC.
Thoroughly qualified, I’d like to see his impact in 100 days.
I have little knowledge about his qualifications or his experience in the generation of electrical power.
If he has the skills and he can function without political interference, (a big ask) he may get things moving as they should.
For that to happen the 3 “ministers” must let the man get on with the job he is employed to do.
A slow day for the sub-editors perhaps, as the answer to the headline question is obviously no. Anyone who has paid even the slightest attention, and perhaps read Andre de Ruiter’s Truth to Power, know that the entire edifice that is Eskom today is unsaveable. The syndicates that feed off Eskom’s coal supplies and are embedded in its major projects have been revealed (even if not exposed). We know from questions asked at parliamentary committee meetings that the rot goes as high as senior politicians. We know that the focus should be on expanding our transmission network, to unlock the full opportunity presented by renewables and JET funding, but all we’ll talk about is fixing old power stations. We know that Treasury’s procurement rules serve only to make things more expensive, and work against any agility the entity might benefit from by working with OEMs. We know that Mantashe is perhaps the most damaging of all our current politicians, who will work against anything that doesn’t suit the embedded cadre beneficiaries, including letting Eskom bypass Petro SA and buy diesel directly. And municipal debt has exploded. There have never been more municipalities and entities who don’t pay, and no appetite to make them. And so on. On top of which the new top man will have a 5th minister to navigate, the smiley, feckless Ramokgoba.
No, Marokane can’t ‘fix’ Eskom. The high road here is a semblance of stability, reasonable transparency, and small step wins.
What to say? It has all been said before. Fire the ministers!
The last paragraph clearly demonstrates that the ESKOM-mess will NEVER be resolved if that situation prevails.
One man cannot possibly heal the cANCer from within. Just another fairytale.
Indeed, with Gordhan and Mantashe at the ultimate Eskom helm assisted by the inept Ramokgoba, this poor man will simply be a scapegoat used to handle their incredible inefficiency and pig headed refusal to accept that politicians should never be allowed to run spaza shops, much less SOE’s like Eskom, Prasa, SAA. SABC, Denel. etc etc.
Those in glass houses … When de Ruyter was appointed all articles were about his failures and how he would destroy ESKOM, when he was shafted all articles were about why he should not leave and how good his tenure was. This quite clearly exposes the fickle and uninformed nature of many commentators. Marokane has a BSc Chem Eng from UCT which is not exactly the easiest degree to obtain and as far as I know UCT is still not in the business of handing them out freely. Only once he has had the opportunity of at least attempting to refloat the sinking ship or slow the sinking rate will criticisms be warranted. Rather than trying to take premature pot shots at him how about supporting him? And as for his tenure at Tongaat was the demise of his doing or did it commence well before the start of his tenure? ESKOM needs someone who can manage the transition whilst it is being broken up and someone who does in fact have a vaguely established relationship with the private sector as much of the finance to resuscitate those parts of ESKOM that can be kept alive will have to come from the private sector unless you are happy to be paying more VAT, more personal tax and around R 5.00 kWh.
…”Only once he has had the opportunity of at least attempting to refloat the sinking ship or slow the sinking rate will criticisms be warranted.”…
Nah… after a quarter of a century of ANC’s South Africa I think we can take an educated guess at the absolute shambolic job he will do.
I would rather say let’s expect him to be a complete horror show, as it sets us up for the 99.5% likely situation… and then if he happens to be the first EVER person appointed by the ANC who is actually capable of doing something more complex than stealing, then we can all Kumbaya around the fire till the lights come back on.
…”Marokane has a BSc Chem Eng from UCT”…
Yeah, the ANC is full of Dr Professors!!!
Surely not a serious question.
That man’s expression just screams “WTF am I meant to be doing here”
Of course NOT! Just another plaster on a gaping arterial wound, similar to appointment of the “Black-Out minister”. anc are so corrupt their attempts at diversionary smoke & mirrors tactics like these arbitrary appointments are entirely transparent. Kudo’s to DeRuyter for highlighting the massive CORRUPTION the anc cadre deployees engage in at eskom, but hey no-one is allowed to speak of that in mainstream media for fear of losing government advertising/subscription/favour…except maybe this publication.
More Taxpayer’s money.
A very cynical view: No matter how hard he tries, he is snookered by all the comrades/cadres presently at the trough.
I would love to think that there is hope that he might be able overturn the trough and chase all the greedy pigs away… But that is ahope in hell…
The only solution? Like a rabid dog, Eskom needs to be euthanized. There is NO solution to the insurmountable problems. Let the assets – excluding all staff and mangers – be sold to the highest bidder, and start from scratch as a private company accountable to customers and shareholders. Ditto for railways, ports, and everything the government has turned to dust.
Absolutely agree and charge the criminals
I rather answer this with looking at the broad spectrum of South Africa today. As one has to tip toe to say the least, anywhere where one is allowed to say something. Too much to the left…oh no you may upset this setup of people, too much to the right oh no you surely upset another setup of people. I tell you what I do with that: When I walk down the road or come to a big shopping centre parking, I great everybody with a smile, when I see a couple with their new born I compliment them truly from my heart and in between when I see a good friend I hug her because Covid is over.
However if I am confronted with whatever I am not doing or even thinking, I make my point without hesitation, I’ll speak the truth.
I found that is the best because all parties know where they stand with me.
To add the least: I still have to be paid R 10.000 for a work done, which done by somebody else would have cost them R 28.000. Ek se maar net…
Power utility is not broken but done so by Jamnandas and his suspended Head of Security. There is no case against Koko.
Now that Koko’s case is on ice, Gwede must create post for Koko. #PetroSAGarzprombankDeal
The only way to do it is one power station or unit at a time. Job by job. Clean out the maggots, use systems outside the current Eskom quagmire, one station, one unit at a time. However the political leaders will have their filthy paws in all the processes and the job will be impossible.
Besides the ANC corrupt, the rest of us citizens hope he is truly successful as the CEO of Eskom.
Yes he can, he will need to fire his bosses boss. Possible yes, probable no. Miracles happen occasionally. He will need to get his facts straight, with the view of exposing people to embarrass the ANC in parliament and internationally. Shaming people works.