In a surprising turn of events on Monday the Minister of Public Enterprises Pravin Gordhan issued a press release announcing the resignation and departure of Mpho Makwana, the chairperson of Eskom.
The press release skimped on the reasons for his resignation. The emphasis was on the cordial manner in which Makwana decided to exit the power utility.
Makwana will be finishing his tenure as chair and executive director of the board of Eskom at the upcoming Annual General Meeting at the end of October 2023.
He was a great Eskom chairperson. I feel that he might have felt a little bit undermined, overlooked and undervalued. But he did a sterling job of pulling Eskom together and giving it direction. This as there are too many captains in Eskom trying to steer the ship.
Makwana steered Eskom during its most confused era in its leadership ranks and provided great strategic and visionary leadership. It is an unfortunate loss to the power utility to lose such a talented executive director.
Remember in the absence of a CEO the Chairperson is automatically in charge of the ship. A worrying concern is that it seems Nedbank enjoys a rotating door and monopoly over Eskom leadership.
Remember Nedbank owns and funded a large chunk of independent power producers. The board of Nedbank is one of the largest lobbyists and investors in green renewable energy. It is also a direct competitor and supply of Eskom at the same time. This makes is a player as well as buyer of power at the same time - a highly concerning revolving door at play.
Well, Mteto Nyati mysteriously resigned days ago from Nedbank and on Monday later afternoon he suddenly gets appointed as interim chair of Eskom.
Nedbank said on Friday the resignation was due to increased capacity constraints. Nyati had accordingly also stepped down as a member and chair of the group IT committee, and as a member of the Directors’ Affairs and group Risk and Capital Management committees.
So, of course, his appointment on the Eskom board naturally raises eyebrows and brings into question issues such as underhanded dealings and agreements regarding his sudden departure from Nedbank to be appointed to Eskom’s board.
Is there an undisclosed revolving door secret agreement that the rest of SA Inc is not privy to?
This raises corporate governance alarm bells.
In a properly run corporation that adheres to corporate governance the process of appointing a chairperson is usually undertaken by the board itself.
The board should exercise its powers to identify, nominate, make recommendations on the appointment and announcement of the incoming chairperson of the board who will run Eskom’s board.
There are widespread suggestions that the current remaining board members of Eskom should follow suit and resign if they have any sense of commitment to fiduciary duty and level of integrity.
Privatisation argument
The Minerals Council of South Africa has called for the government to stop its support and bailout on capital injection on Eskom and instead the Council says that it is time that Eskom be privatised.
The privatisation agenda will not assist Eskom, nor the government, in repairing the current status of the economy. The electricity demand and needs of the economy responsibility rests solely with the state.
To fully privatise that responsibility to the private sector will simply render the state ineffective and no longer viable to operate as a functional capable state. We are a developing country that needs state intervention for growth.
Energy security and sovereignty demands that the state should have guaranteed security and control over the generation and production of electricity. That is the reason why the Electricity Regulation Act exists.
Eskom was created over a 100 years ago through a process that amalgamated and nationalised all the power stations which were privately owned.
The state at the time led by the nationalist government devised a generational program to acquire, build, operate and own all power stations in South Africa; for the simple reason of controlling the socio-economic and industrial policy plan and sovereignty and security policy of the country.
In a recent interview by former minister Trevor Manuel on CapeTalk Radio he stated very categorically that South African leaders should seriously reflect on the fact that South Africa is a very young country with a majority of young people.
He further said, “political leaders need to reflect SA more closely. It is a fact that SA is a young country. The fact that you have got so many people over 65 who are sitting in the cabinet and Parliament and so on is part of the difficulty and we don't need more (over 60 people) leading”.
And, furthermore, he said, “I am on the wrong side of the age curve now and this is a big issue.”
Mind you, Manuel is just over 67 years old. He retired more than 10 years ago soon after president Thabo Mbeki left office. Manuel took a principled decision and retired from politics and government leadership roles to make room for more younger people to take over the leadership and governance space.
That is the kind of exemplary leadership that South Africa truly needs. A conscious, accountable, ethical and reflective leadership.
Recently Pravin Gordhan, the Minister of Public Enterprises, rejected the Eskom board recommendation for the prime candidate nominated to fill the position of Group CEO of Eskom.
Gordhan rejected the recommendations for the candidate and insisted that the Board must go back to drawing board, field in more names and also for the board to reconsider its position on discouraging appointing anyone to head Eskom who was more than 60 years and older.
Look, it was a sound Board recommendation. Even a seasoned highly respected global personality such as Manuel agrees on the fact that political leaders must be cognisant of the fact that South Africa needs to be led by a much younger generation.
The country has way too many retirees hanging around wrongfully employed in the State Department and State-Owned Entities (SOE). South Africa needs to seriously reflect its age demographics and related realities.
The point cannot be made any louder. We have a true patriot and younger generation as Electricity Minister Dr Sputla Ramokgopa. He is currently one of the best performers in the government since taking over leadership in the energy sector.
Eskom's performance has seen dramatic improvement under his leadership. Over the six months under his leadership Eskom recovered more than 5000 MW in energy generation and plant maintenance recovery.
The minister of electricity is surrounded by a young, capable team of well experienced and dedicated Eskom staff. He brought in his own complementary team that has injected incredible energy into turning around Eskom employees' morale.
Today and over the last week, load shedding and those constant irritating power cuts have been suspended during the day. We no longer have load shedding during the day. And only Stage 2/3/4 for now is implemented during peak hours starting from 4pm in the afternoon till 5am in the morning.
This feat of ingenuity in prioritising the fixing of power stations could not have been possible if Eskom did not restructure its board. The changes started when the new board under the Chairperson and leadership of Makwana was introduced. His resignation and departure will leave a massive vacuum.
Crown Prince Adil Nchabeleng is President of Transform RSA and an Independent Energy Expert.
* The views in this column are independent of Business Report and Independent Media.
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