LETTER: Eskom CEO title brings with it an unavoidable fate

Standard Bank CEO Sim Tshabalala recently suggested that Eskom should consider hiring an international candidate to succeed its outgoing CEO, André de Ruyter (“Sim Tshabalala urges SA to be bold in search for new Eskom boss,” January 12).

Although he is trying to be helpful, his suggestion misses the mark. A foreign appointee — no matter how capable or qualified — will not be able to fix the mess at Eskom. Another South African in the post won’t succeed either.

Even if they do manage to convince somebody to take the job, that person will need to be properly capacitated to execute their work. During a podcast interview in July last year, I asked De Ruyter why he accepted the CEO position. “I was probably motivated by a dangerous cocktail of patriotism and naïve optimism that I could make a contribution,” he joked.

Perhaps it was that same sense of patriotism (and a lot less naiveté) that motivated De Ruyter to call it quits. The terms of reference for the job were impossible to begin with, and his authority was continuously undermined by the very cabinet that appointed him.

Unlike Tshabalala, who is accountable to his customers, shareholders and board members, De Ruyter is accountable to only one shareholder: the government. Unfortunately, the government he serves has a rigid view that state-owned e entities must always play a central role in the economy and society. Consequently, De Ruyter was powerless to do what was necessary to save Eskom. When you have one “shareholder”, who really calls the shots?

The problems at Eskom are not technical, but political.

When I asked De Ruyter during the podcast what he thought about race-based procurement policies he was polite, but also frank in his assessment: “Interposing non-value-adding intermediaries in the process of procurement inflates costs, it introduces additional risk in terms of potential corrupt practices, and it also slows down our supply chains.”

Political problems require political solutions. Unfortunately, the same politicians who got us into this disaster are not the ones who will get us out of it. The solution is to get these politicians as far away from the energy sector as possible.

One strategy will be to unbundle Eskom’s generation, transmission and distribution functions and vastly increase private sector involvement in each domain. This will be difficult and complicated, but far from impossible. After all, SA has been generating electricity since the late 19th century. This is not as hard as landing a man on Mars, as Elon Musk hopes to do.

Eskom can hire the best CEO in the world, but without a fundamental overhaul of energy policy in SA, this will not make much of a difference. Whoever is appointed next will face the same unfortunate fate as their predecessor.

David Ansara
Free Market Foundation

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