Eskom leadership vacuum may deepen

The leadership vacuum at Eskom, which has been without a permanent CEO for most of the year, may deepen as the end of the employment contract of CFO Calib Cassim looms.

This as negotiations to get lender consent for the unbundling of Eskom have not yet been finalised and Minister Of Electricity Kgosientsho Ramokgopa is wooing investors to spend big bucks on strengthening the Eskom grid.

Peter Attard Montalto, MD and global lead of capital markets and political economy at Krutham (formerly Intellidex), says if the CEO appointment is further delayed and Cassim leaves as well, it “will seriously alarm creditors”.

Cassim has been acting in the CEO position since the departure of former CEO André de Ruyter in February following a controversial TV interview in which De Ruyter implicated unnamed cabinet members in corruption at the utility.

It is not clear if any steps have been taken to secure the services of Cassim after his contract ends at the end of December, which may leave the utility without a permanent CEO or CFO.

The risk of a completely leaderless Eskom increased substantially after Public Enterprises Minister Pravin Gordhan last week rejected the Eskom board’s preferred candidate, citing procedural issues.

Following criticism of his decision, Gordhan in a statement on Thursday refuted claims that he is stalling the appointment of the Eskom CEO, saying that the distortions and lies being peddled over the process are an attempt to subvert his responsibility to ensure that the appointment is done in a transparent and lawful manner.

While the board has not yet stated whether it will start the recruitment process afresh, sources within Eskom says that is the instruction given by Gordhan.

Tommy Wedderspoon from trade union Solidarity says that is also the message conveyed to trade unions at a forum with the employer last week.

If that is indeed the case, there is little hope of completing the new process before Cassim serves his last day on 31 December.

Asked what steps have been taken to ensure stability in the CFO position after 31 December, the Eskom board merely stated: “Eskom will communicate at the right time.”

Attard Montalto says: “Tensions appear to be rising between the board and the Department of Public Enterprises over the CEO issue, and restarting the process will not lead to any new answers but instead creates a huge risk of a gap if indeed Cassim does leave which will seriously alarm creditors.

“There are no viable internal candidates [who] could take over on an interim basis. All this goes to prove nothing is really changing with governance at state-owned enterprises.”

The names of four candidates believed to be on the shortlist for the position of Eskom CEO have emerged:

• Dan Marokane, former Eskom executive and current acting CEO of Tongaat Hulett – his candidacy is supported by Solidarity and several sources believe he was the board’s preferred candidate;
• Ayanda Noah, former Eskom executive, chair of the Central Energy Fund, and according to ANC sources, the party’s preferred candidate;
• Vally Padayachee, former Eskom and City Power executive and current special advisor to the Association of Municipal Electricity Utilities, a key stakeholder in the electricity supply industry; and
• Paul O’Flaherty, former Eskom CFO and current EY-Parthenon Africa Leader. O’Flaherty previously told Moneyweb he is not available for the job and reports confirm that he has turned it down.

Speculation is rife that Gordhan sees Noah as too close to Minister of Mineral Resources and Energy Gwede Mantashe, who is seen as resisting the transition to cleaner energy in favour of coal and promoting nuclear energy.

According to sources Gordhan was initially happy with Marokane but has changed his mind as Marokane is expected to stand up to political interference.

Gordhan has been widely criticised for trying to micro-manage Eskom and other state-owned enterprises that he oversees politically. Former Eskom chair Professor Malegapuru Makgoba says in his book ‘Leadership for Transformation Since the Dawn of South Africa’s Democracy’ the minister strongly believes his way is the only way to solve complex problems.

DA spokesperson for public enterprises Ghaleb Cachalia says only Gordhan will know where he will be looking for a candidate.

Cachalia says Gordhan is looking for someone who is prepared to do his bidding, and that he is completely out of line.

He says to restart the recruitment process from scratch will take too long. “Everything is always overdue and then it is hurry up and rush at five minutes to twelve!”

Cachalia asks who will be interested in the job without a guarantee that there will be no political interference.

“In the end it will only be another cadre deployment. That is what Gordhan does at all the state-owned enterprises and they all fail.”

Read: Godongwana’s Eskom plans confirm De Ruyter’s claims of entrenched corruption