Eskom battle heats up

2015-03-15 15:00

The war at Eskom is set to get uglier as the four suspended executives fight back against the action and their allies lobby for political support from influential leaders in the ANC.

They are already receiving support from colleagues within Eskom, amid anger that only black managers were being blamed for the power utility’s woes.

Eskom board chairperson Zola Tsotsi shocked the country this week when he announced the suspension of Eskom CEO Tshediso Matona; Eskom’s financial director, Tsholofelo Molefe; technology and commercial executive Matshela Koko; and head of group capital Dan Morokane.

The suspensions were implemented, Tsotsi said, to enable the board to turn the corporation around and give the board unfettered access to information that the executives were allegedly holding back.

The suspended executives allege that Tsotsi has been behaving like an executive chair, interfering with the day-to-day operations of the company.

In response, Tsotsi said: “I have articulated the Eskom board’s reasons behind asking the four executives to step aside during the independent inquiry. There is nothing more to add on the matter. Please refer to the media statement I read out at the press conference on Thursday.”

An insider said that ever since Matona’s arrival, he and his officials have been pushing back against this interference.

Sources have said there was a push by some powerful people to direct the lucrative diesel supply contracts towards their favoured suppliers. The executives were also resisting pressure to favour a “Saxonwold family” when it came to sourcing coal supplies.

A source close to the board said the drama began unfolding at a board meeting on Monday, when Tsotsi tried to push for the suspension of the four. He cited the need to have them out of the way in order for an inquiry to be conducted into the nation’s power crisis so that a turnaround strategy could be implemented with proper information.

What shocked those present, City Press has been told, was that the inquiry had been initiated by some board members and accepted by the entire board with the understanding that the executives would play an integral role in it. This had come after a realisation that information about the crisis was unreliable.

There were crossed lines between Eskom itself, the responsible ministries – public enterprises and energy – as well as with the interdepartmental “war room”.

The war room, which was set up in February, had not been successful in fulfilling its coordinating role between the various players because of turf wars and mistrust.

The external inquiry was then meant get to the bottom of the crisis and provide definitive answers on the way forward. Eskom’s top executives were supposed to play an integral part in this process.

“Board members were, therefore, shocked when Tsotsi used the process as pretext to suspend the execs,” said the source.

Tsotsi was defeated.

At the reconvened meeting on Wednesday, Public Enterprises Minister Lynne Brown lent support to Tsotsi, and the rest of the board was cowed.

“By the time she got there, the whole thing was already cooked. They had cooked it elsewhere.”

Brown confirmed that she attended an Eskom board meeting on Wednesday, but denied that she had put pressure on the board to support the suspension of the executive members.

“I have no right to instruct them to suspend or fire anybody. I absolutely have no powers to fire the executive. The only thing I can do is bring to their attention what is in the public space,” she said.

Brown said she left while the meeting was still taking place and received a call at 9pm on Wednesday from the Eskom board to say that they had reached a decision [to suspend the executive members] and “I said I support it”.

The suspended executives are hoping there will be political intervention against the decision as they believe some ANC leaders are also unhappy.

“It will not be in the interests of anyone if this fight gets ugly. An ugly fight will be damaging to everybody. It will affect Eskom badly. The government will be affected badly and the ANC will not remain untouched,” a source familiar with the week’s dramatic events said.

Another source said the reason for the suspensions trotted out by Tsotsi and Brown was far from the truth.

“The official version is rubbish...this thing is big and it is going to get bigger,” said the insider.

The suspension has led to deep unhappiness within the utility, with questions asked about why black executives are being made to be scapegoats.

Two senior employees of the utility also told of how staff were kept in the dark about the suspension until Tsotsi publicly announced the move at a media conference.

One of the employees described the mood within Eskom headquarters as gloomy. “People are asking why four black executives are being targeted when there are so many other people along the chain, many of them not black, who are also responsible for some of the problems we have experienced in terms of keeping the lights on and delays in bringing new generation capacity onto the grid.”

He said the suspension of Matona was even more baffling, considering that he has been in the job for only six months.

“How can they put the blame on him when he’s only settling into the job? The board members themselves, including the chair?...?all of these things they are blaming on him, but it happened on their watch. Why are they still there?

“This is an own goal. We have been receiving such positive publicity after the first of the six units at Medupi was synchronised and produced its first power, and now this.”

The insider singled out group capital executive Morokane, who has extensive fuel industry experience and contacts, which he turned to when the utility was running short of diesel.

“When we were running short of diesel, Dan called his contacts at PetroSA and other petrochemical firms to ensure that we got a steady supply. Since then, we haven’t had a problem with diesel supply. We cannot afford to lose a guy like that,” he said.

The suspended executives refused to comment when contacted on Friday.

Chairperson of the ANC National Executive Committee subcommittee on economic transformation Enoch Godongwana said it was unfair to say that only black executives were being singled out for blame at Eskom.

“I don’t know what people are talking about. I don’t want to comment on the merits of the suspensions, but all I know is that [group executive: generation] Mongezi Ntsokolo and [group executive: distribution] Ayanda Noah are black and they are not on suspension,” Godongwana said.

Jimmy Manyi, president of the Progressive Professionals Forum, said he was shocked by the developments at Eskom, but would first engage a range of stakeholders on the matter before taking up a firm position.

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