- South Africa: speaking at a fundraising event hosted by the SA National Editors Forum (SANEF) this morning, Eskom CEO Andre de Ruyter said the power utility was making headway in clawing back money from defaulting municipalities plus companies and individuals fingered in corruption.
- Diesel use has dropped off and maintenance programmes are getting results.
- Stresses there has been no political interference.
Eskom CEO Andre de Ruyter spoke very frankly this morning on the state of things at South Africa’s state owned power utility. “In exposing the malfeasance that has characterised Eskom for so long, we have been able to recover R1.1 billion from McKinsey. We have recovered in excess of R770million from Deloitte consulting and we are in the process of recovering more than R700million from Trillian and from PwC Consulting. We’ve also gone after the individuals who have sought to enrich themselves at the expense of SA, of the taxpayer and of electricity consumers, by launching in conjunction with the SIU a R3.8bn claim against the Guptas, Salim Essa, Mosebenzi Zwane and former Eskom executives including former CEOs,” he said.
“The principle is not so much that we will recover all the money — much of the money I’m sure has been stashed safely away in strange jurisdictions around the world — but we understand that without holding people to account, you open the doors to a free-for-all,” de Ruyter said.
The power utility, he said, had parted ways with no fewer than 30 senior executives and managers. “We are continuing to investigate and register cases to hold those to account. The sad part is that as a consequence of state capture, such an important institution as Eskom has been hollowed out to a very large extent. “Rebuilding the ethos that made Eskom the top global utility in the world as recently as 2001 — that is a mountain we have to climb,” he said.
De Ruyter added that part of the accountability project was taking an assertive approach to claw back the millions owed by municipalities which now stands at more than R34 billion. Eskom has had to cut off supply to defaulting municipalities and/or attached bank accounts and moveable assets such as vehicles.
He said he had not experienced any political interference, particularly from public enterprises minister Pravin Gordhan, quipping that SAA may have helped his cause. “I think I have been given a free hand to do what I think is best from a business perspective, in conjunction with the Eskom Board.
With Eskom’s gross debt approaching half a trillion rand, De Ruyter said the utility posed a systemic risk to the country’s economy. “We need to find a way of making Eskom financially sustainable and that is a challenge we are engaged with now.”
Related news: Eskom reports a net loss of R20.5 billion
“We are grateful for the fiscal support we receive from National Treasury. Up until 2026, we anticipate that we will be receiving about R121bn. The sad part of this fiscal support is that it’s money that is diverted from other key national priorities. We need to wean ourselves off taxpayers’ support as soon as possible.” The best way to move away from taxpayers’ support, De Ruyter said, was for Eskom to charge cost-effective tariffs. “No business can survive by selling its product below its cost of production.”
De Ruyter also announced that Eskom was on its 40th consecutive day of not burning any diesel to support its system. “At the same time we have taken out for long-term maintenance 11 units, which is equivalent to two major power stations.
He said diesel cost Eskom R10m per hour. “It speaks to the need for us to fix the operational integrity of Eskom. This included getting Medupi and Kusile functioning well. “We are making good progress on that. We now know what the design defects are that have bedevilled those two plants. We have implemented modifications on four of the units at Medupi and we are now at a point where those units can operate to their full capacity.”
Author: Bryan Groenendaal