Budget 2022

Gordhan: New Eskom board appointments will be made soon to help with turnaround

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Government intends to strengthen Eskom's board with members who have engineering skills and experience in turning around institutions, Public Enterprise Minister Pravin Gordhan said.

The minister was addressing the National Assembly during a debate on solutions for Eskom's energy crisis.

Gordhan highlighted the recent developments to strengthen the power utility, including its unbundling into three entities - generation, transmission and distribution. All three entities will remain state-owned. The transmission entity will be established first with a board to be appointed by mid-2019.

Finance Minister Tito Mboweni told the National Assembly on Wednesday that the power utility has been allocated R23bn per year for the next three years, with the intention that it is used to pay off its debt and facilitate the turnaround.

A chief reorganisation officer will also be jointly appointed by the finance minister and Gordhan to carry out the turnaround plan. 

On Thursday, Gordhan put forward these steps to the National Assembly once more and provided details on what government was doing about the crisis in the short term. 

"The board of Eskom has a few vacancies. Within a month or so we will strengthen the board with more engineers to complement [the] current skillset," he said.

Additionally, government met with statutory body – the Engineering Council of South Africa on Friday, February 15 in an effort to resolve Eskom's operational challenges which have led to power outages in recent weeks.

The engineers volunteered their services to government, Gordhan said. Academic institutions have also reached out to government to assist, as part of President Cyril Ramaphosa's "thuma mina" call, he said.

They will constitute an operational review team and will be assessing some, if not all, of Eskom's power stations to detect what kind of maintenance needs to be done, and if operational and engineering principles are followed at power stations.

Gordhan said that currently Eskom's engineers have an average age of 35. The goal is to combine their "enthusiasm" with experience to get the right level of engineering skills at power stations.

Gordhan also said that government is consulting with relevant stakeholders on the future of Eskom – including labour.

The labour minister is arranging a meeting between the department of public enterprises  and the National Economic Development and Labour Council (Nedlac) on March 5 to give them a better understanding of the issues at Eskom and the plans in place to turn things around.

So far government has had two meetings with labour. "That is the beginning of the process," he said. Gordhan said that government and Eskom have a responsibility to its 48 000 employees to ensure that they have some sort of job security, which will involve preparing them for the shift in the energy sector which is moving towards renewables, and no longer reliant on traditional sources like fossil fuels.

Government also engaged with CEOs of coal mining companies last week Friday, who have provided more insights on the pricing of coal and government has received recommendations from them.

Government is yet to meet with Eskom's equipment suppliers.

No privatisation

Gordhan also hit back at claims by the Economic Freedom Fighters that the unbundling is an attempt to privatise Eskom.

"The president has made it clear, the intent is to supply energy to the country and not to privatise," he said.

He also added that the effects of corruption at Eskom still remain and it is like a cancer which needs to be removed. Government supports Corruption Watch's court application to have some of Eskom's directors declared delinquent.

"Many should end up in jail instead of sitting comfortably at home," he said.

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