Eskom: We need a commission of inquiry and culture of consequences

Manie van Dyk, Shadow Deputy Minister of Public Enterprises
1 February 2010

The series of new revelations concerning Eskom in general and its acquisition of a new power plant in particular constitute a critical mass of maladministration and mismanagement; and, the DA believes, the only viable course of action now, if Eskom's decline is to be arrested and its performance turned around, is for the President to appoint a commission of inquiry into its affairs.
 
Most recently, it has been revealed that Eskom ignored a number of rules and regulations by awarding several contracts worth millions of Rands, without putting them out to tender. Who the beneficiaries of these tenders are remains unclear. The majority of these abuses appear to have taken place with regards to the construction of the Kusile power station, which according to a major expose in yesterday's Rapport, apparently cost five times more to build than similar projects elsewhere in the world. Further, it also appears that a coal contract for supply to Eskom's Hendrina power station was awarded without going to tender, with the net result that the cost for coal there has now doubled.
 
These developments come on the back of perplexing remarks made by the Eskom management at the portfolio committee on public enterprises last Thursday, where it was claimed that it pays more for coal than the export cost of coal. This was subsequently refuted by Anglo Coal CEO, Norman Mbazima, who pointed out that Eskom does not use the grade of coal used in exporting - that there is no interchangeability, and thus that Eskom's charge was spurious. In another attempt to shirk responsibility, Eskom also raised concerns around the declining quality of coal, a claim Anglo Coal once pointed out had little merit. The 36.5 million tonnes of coal Anglo Coal supplied to Eskom annually comes from three mines that have a long-term lifespan of up to 41 years.
 
But all of this, which is cause for some serious concern in and of itself, pales into comparison to the bigger picture: a public utility that operates on the red line everyday, a situation that has resulted from years of bad practice, financial neglect and the imposition of wrongheaded political considerations that run contrary to best practice and have systematically eroded away many parts of Eskom's organizational integrity.
 
Against this background, a commission of inquiry would serve two purposes: on the one hand, it would help identify who was responsible for this decline. This is important not only to understanding where the problem lies - that is, what portion of the blame can be placed at the feet of the national government and what portion of the blame can be attributed to bad management by Eskom itself - but in order that those problems be rectified and, where necessary, systems be overhauled or replaced.
 
On the other hand, it would help better instill a culture of consequence. It is a remarkable fact that, to date, not a single person has been fired, suspended, investigated or publicly criticised for the debacle that saw the country actually run out of electricity. It is true that Jacob Maroga resigned but, if anything, that was against the wishes of government.
 
One might well ask - how is that possible? That not a single person has been held to account? If the ANC is serious about creating an "ethos of accountability" (to quote the rationale President Zuma gave when launching the Presidential Hotline) it needs to start with the biggest problems facing the country and work backwards from there. On that scale, Eskom is at the top of the list. The ANC leadership needs to recognise this fact and President Zuma needs to lead the way.
 
He needs to establish a commission of inquiry - only then will the public (who will be funding the consequences of Eskom's mismanagement) and the government fully understand where the problems lie, who was responsible and how best to go about fixing the situation. Without it, the problems at Eskom will continue to leak into the public domain unchecked and the structural weaknesses which clearly now define Eskom's management will continue to fester, a situation which will only ever cost the South African taxpayer more money.