Eskom chair Jabu Mabuza: Land reform needs cool heads

Cape Town - Do not inflame the issue of land reform further by being "hysterical", new Eskom chair Jabu Mabuza cautioned on Wednesday.

He repeatedly called for "calm and cool headedness" about the issue during a panel discussion at a "Future of South Africa" event hosted by Bloomberg LP in Cape Town.

Mabuza acknowledged that land reform is an emotional issue, but believes in President Cyril Ramaphosa's view that it is nevertheless an issue that must be dealt with. "Be cool headed and see how we can address this emotive issue and ensure that we can achieve what we want to do," said Mabuza.

"We cannot continue to suppress the 'spring of hopelessness'."

Eskom

As for Eskom, Mabuza thinks the problems at the state-owned power utility "have been there for too long, are too big and run too deep in the organisation".

"We are doing all we can to bring leadership from our side. Hopefully we bring the integrity and ethical approach that can identify problems and come up with a detailed plan to address them," he said.

"We have agreed with Minister of Public Enterprises Pravin Gordhan as our minister on a framework that we will take regarding where the board's role starts and where his role starts. We are in the process of appointing [a] CEO and CFO for Eskom."

Mabuza emphasised that Eskom cannot continue to trade by means of bailouts and tariff increases.

"It has to generate power, sell it and collect the money for what was sold. We need to revisit the balance sheet as debt levels are not good. We are also looking at the corporate structure. Our cost structure does not seem to be right. We have to restructure to be profitable," he said.

Jobs

Jobs and inequality are the two most important things to address in SA, in his view.

"CEOs don’t normally think of job creation – they think of how much they can create for how much less," he said. At the same time, he wants those with jobs to work well and efficiently.

"We cannot have a situation where it apparently costs us double to produce half. That cannot be right," he said.

"There are 47 000 people at Eskom. Some people say we need only 16 000. We don't want to be accused of firing them, but we need to have the right people. We must look at what is right for the company and then look at where the person who is not right for Eskom can be skilled to work elsewhere."

Stephen Koseff, CEO of Investec Group, was another member of the panel discussion.

"I said during a recent IMF panel discussion of which I was part that Eskom has to be fixed. Telkom is not a burden on the state. Why can we not have the same at Eskom. If you look at the Eskom balance sheet from the point of view of a bank, you want to die," said Koseff.

"SA has come a hell of a long way since December. We have to regard ourselves as a lucky country. As individuals and corporates we have to also roll up our sleeves and make a difference. Economic growth has to be at above 5% to be meaningful."

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