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Ramaphosa’s Eskom recovery plan will fail unless corr...

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Opinionista

Ramaphosa’s Eskom recovery plan doomed to fail unless past, present corruption is tackled

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Paul Hoffman SC is a director of Accountability Now.

Eskom was one of the primary targets of State Capture. It is no coincidence that the balance sheet of Eskom shows that its current indebtedness exceeds R400-billion. A large proportion of that debt is attributable to the ravages of State Capture.

The 45-minute announcement by the President during his “family meeting” on 25 July 2022 can be summarised in 10 points:

  1. 100MW renewable licence threshold removed;
  2. Additional generation of renewable energy gas and battery storage with pragmatic requirements for local content to facilitate speed; the sixth bid round raised from 2,600MW to 5,200MW with further rounds to be speeded up;
  3. Crisis committee under the Presidency DG will coordinate all relevant departments using best expertise from business, professional engineering entities, labour and civil society with regular reporting by ministers to the President;
  4. Boosted maintenance budget cutting out the red tape delaying purchases;
  5. Engineers to be recruited including former plant managers and engineers from the private sector;
  6. Eskom to buy extra power from private entities, such as mines, with extra capacity;
  7. More power to be imported from Botswana and Zambia in terms of the Southern Africa Power Pool arrangements;
  8. Instead of a state of emergency, special legislation will be passed to speed the regulatory process for new power generation eliminating delays of years and months with a single approval point for energy projects;
  9. Own solar incentivised: Eskom will develop a new price structure to encourage businesses and households to install solar power and connect to the grid; and
  10. Competitive energy market to be facilitated: more private and state-owned companies will be able to participate in the energy market although the grid will remain state-owned.

During the course of his address to the nation the president mentioned the following factors:

“The performance of some of Eskom’s power stations has been further worsened by extensive theft, fraud and sabotage.

“After years of State Capture and mismanagement, a capable and effective management team is working hard to turn the utility around and reverse years of decay.”

The newly announced plan does not adequately address the issues around State Capture and corruption as they have impacted, and still do impact, the functioning of Eskom.

Eskom was one of the primary targets of State Capture. It is no coincidence that the balance sheet of Eskom shows that its current indebtedness exceeds R400-billion. A large proportion of that debt is attributable to the ravages of State Capture.

State Capture saw its heyday during the Zuma years, but long before they dawned, the ANC was using Eskom procurement as an illegal fund-raising tool for the party. By way of example, the Hitachi Power Africa debacle saw Hitachi fined for corruption in the US. This occurred with the ANC sailing on with impunity and an injection of over R5-billion in its coffers, according to the research of Prof William Gumede.

Those who are currently sabotaging Eskom installations are doing so in pursuit of their own greed, be it gratification in the form of increased remuneration or by way of weakening the faction of the ANC they do not favour. Their activities border on treason or sedition but remain unaddressed due to the dynamics of factionalism in the ANC.

The notion of equality before the law does not apply in these circumstances. Advancing the agenda of some or other faction of the ANC is regarded as an activity that is above legal scrutiny and as revolutionary zeal which is allowed with complete impunity. This would explain why Bheki Cele has never been charged for his nefarious SAPS headquarters leases and triple the going rate for rentals.

The coffers of Eskom could be considerably swelled if concerted efforts were made to rake back the loot of State Capture that was taken from Eskom. While some small progress on this front has been seen, it is minuscule when compared to what could be achieved via a worldwide and muscular campaign to recover all amounts looted from Eskom.

There is no rocket science involved in international debt collection. With the right amount of political will the freezing, seizing and recovery of loot is possible in most jurisdictions to which the loot has been removed by those involved in State Capture and other forms of serious corruption that have impacted so negatively on the balance sheet and abilities of Eskom to keep the lights shining.

The apprehension, investigation, charging and prosecution of those who have made Eskom their criminal playground is long overdue. Taking these steps will deter those still bent on destroying or looting Eskom, they will be used to hold those guilty of past transgressions to account and they will be the occasion for the recovery of amounts looted by those hauled before our criminal courts.

One of the main planks of the Ramaphosa new dawn was a commitment to anti-corruption activity.  Far too little reform has been seen on this front.

It is so that the NEC of the ANC resolved in August 2020 to instruct Cabinet, as a matter of urgency, to establish a new, independent, stand-alone, specialised entity to deal with corruption without fear, favour or prejudice. There has been no sign of urgent activity in the nearly two years that have elapsed since the resolution was passed. The NEC seems to be distracted by internal politicking within the ANC and has apparently not followed up on its resolution.

It is also so that the IFP has long championed the establishment of a new Chapter Nine institution to counter serious corruption. In March 2019 the president undertook to mull over this “refreshing” idea. He is still mulling, but no evidence of action on his part has emerged.

It must be noted that the DA has, in the course of this year, come to the same conclusion as the IFP and the NEC of the ANC. Having previously championed the reform of the investigation of serious corruption, the DA is now working on a private member’s bill to introduce legislation aimed at preventing, combating, investigating and prosecuting serious corruption via a new Chapter Nine institution.

The Constitutional Review Committee in Parliament, which will need to be persuaded of the need for a constitutional amendment to create the new body, has taken note of these developments and has resolved to invite Accountability Now to make a comprehensive presentation to it on the topic of setting up the new institution that will deal with serious corruption.

While Eskom has been and still is one of the major victims of the culture of corruption with impunity in SA, not a peep of what is to be done to address this problem is mentioned anywhere in the address by the president on 25 July. His words quoted above show that he is aware of the challenges that are posed to Eskom by criminality and corruption.

His silence on the steps to be taken to address ongoing attacks on Eskom and on recovery of loot taken from Eskom means that there are missing links in his otherwise apparently genuine and meritorious efforts to address the inability of Eskom to keep the generation of electricity on a reliable footing.

The President is surely aware that failing to address corruption with impunity head-on will exacerbate Eskom’s challenges both at present as regards reliable electricity supply and in the past as regards recovery of loot. He knows that economic recovery is impossible without a reliable supply of power. He also knows that new investment in SA is going to be difficult to attract while the culture of corruption with impunity is allowed to continue on his watch.

The missing links in his address to the nation, both as regards recovery of loot and as regards ending corruption with impunity render the new plan one that will limp along awhile, unless the director general in his office, tasked with oversight of the recovery of Eskom, identifies the problems sketched above and takes steps to address them.

If ongoing corruption is appropriately addressed via reform of the criminal justice administration aimed at enabling it to counter corruption in the manner envisaged by the Constitutional Court in the Glenister litigation, the new plan has every prospect of success. If not, the converse applies. DM

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