CONFLICT OF INTEREST
Brian Dames steps down from Eskom task team
Dames noted concerns regarding ‘perceived conflict of interest’ relating to the scope of work and terms of reference of the task team
Brian Dames, the former Eskom CEO who runs Patrice Motsepe’s energy company, has stepped down from the task team set up to advise the government on how to save the crisis-hit utility, citing "perceived" conflicts of interest.
This comes just a week after President Cyril Ramaphosa appointed him as part of the eight-person task team.
The team includes Mick Davis, a former executive director at Eskom who went on to found Xstrata, which was eventually taken over by Glencore, one of the world’s biggest mining companies.
The government is struggling to come up with a turnaround strategy for Eskom, which has debts of more than R400bn, largely guaranteed by the state, which have emerged as one of the key risks to the country losing its last investment-grade rating.
A loss of that rating could potentially lead to capital outflows, raising borrowing costs across the economy.
The power utility, which provides virtually all of the country’s energy needs, resorted to load-shedding in December, threatening businesses that depend on a secure and reliable supply of electricity.
The Presidency on Wednesday said Dames, who is CEO of African Rainbow Energy and Power, had informed Ramaphosa that he was unable to sit on the task team.
Dames had noted concerns raised regarding a "perceived conflict of interest" relating to the scope of work and terms of reference of the task team, presidency spokesperson Khusela Diko said.
Dames left Eskom in 2014 and joined Motsepe’s African Rainbow Energy and Power where he started the company’s renewable energy division. While the company has not done any deals with Eskom or the energy department, Bloomberg reported last week that the utility was in advanced talks with Motsepe’s African Rainbow Capital to sell its home loans business.
Motsepe is Ramaphosa’s brother-in-law. Dames declined to comment, and the presidency said it would not replace him.
Dames appeared before parliament’s inquiry into state capture at Eskom where he said he resisted early attempts by the controversial Gupta family, friends of former president Jacob Zuma, to gain control over the power utility.
The former Eskom CEO, who worked at the parastatal from 2010 to 2014, alleged that former public enterprise minister Malusi Gigaba’s adviser at the time, Siyabonga Mahlungu, had arranged for him to meet one of the Gupta brothers.
They discussed coal contracts for the Lethabo coal station in the Free State and requests for another coal power station to be built in the Free State after Medupi and Kusile were completed, he said.
Ramaphosa’s Eskom task team also includes a unionist, former National Union of Mineworkers general secretary Frans Baleni .
The team has been given a broad mandate that would include assessing the appropriateness of the Eskom business model and structure.
It would also review a turnaround strategy submitted by the board, including "key assumptions, impact on tariffs and industry, and viability of proposed solutions on the future role of Eskom", according to the presidency statement last week announcing the team.
The task team is set to issue its report before the end of January 2019.