Judicial Inquiry needed after DA documents reveal Eskom ignored energy crisis warnings

President Jacob Zuma must appoint a Judicial Commission of Inquiry to investigate why the CEO of Eskom, Jacob Maroga, ignored a series of confidential internal memos that showed Eskom's internal practices were precipitating an energy crisis in South Africa, and to determine who else knew about them. One of these memos, authored by a leading international expert on the subject, warned that "without intervention", Eskom's primary energy generation faced "collapse", and would not be able to "meet current needs, much less future requirements". This memo was delivered to Mr. Maroga just six months prior to the rolling blackouts that hit South Africa in early 2008.

The consultant, who also provided intricate details of the steps Eskom needed to follow to avert the crisis, had her contract with Eskom terminated days after the memo was sent.

(A full copy of this damning seven-page memo can be read here.)

The most serious series of allegations pertain to the "cost-plus contracts", which Susan Olsen, a partner at a leading international oil and coal research group, shows allowed South Africa's major mining companies to exploit Eskom, and actively inhibited Eskom's power stations from working at full generating capacity.

More broadly, Olsen demonstrates how Eskom's lack of experience and failure to understand coal markets played a significant role in their later supply problems, and how Eskom's "hemorrhaging [of] talented staff" had left the power utility lacking "leadership, experience, knowledge and direction".

Mr. Maroga told a hastily arranged press conference in Johannesburg yesterday evening that Eskom was aware of the weaknesses with its contracts - but if this is the case, why was Olsen's contract swiftly cancelled by Eskom after these problems were brought to Mr. Maroga's attention? And why did Eskom only form their internal coal crisis committee in January 2008, after the first power outages, and a full five months after Olsen's report had been submitted? The unmistakable impression is that, far from being willing to acknowledge their supply problems, Eskom had its head buried very deeply in the sand. And the consequences of its own internal mismanagement were (and remain) severe for the South African public.

A Judicial Inquiry needs to be established to investigate why Mr. Maroga failed to take action on these memos - a decision that, ultimately, paved the way for the energy crisis that has cost hundreds of millions of rands over the last eighteen months, cast South Africa into darkness, and ground our economy to all but a halt.

Importantly, former President Thabo Mbeki needs to appear before this Inquiry, along with the former Minister of Minerals and Energy, Buyelwa Sonjica, and former Minister of Public Enterprises, Alec Erwin. All three of these people need to account for their role in this debacle. In this regard, the following needs to be established:

• Whether they knew about the memo and the warning it contained; if not, why not?
• If they did know, what action did they take in response; if none, why?

To date not a single person has been fired, sanctioned, suspended or even publicly reprimanded for mismanagement in a scandal that literally left South Africa without electricity. President Jacob Zuma has waxed lyrical about creating a new "ethos of accountability". It's time for him to walk the talk.

I will also write on Monday morning to the Public Protector, to request an urgent investigation into this matter.

This past week, the DA has also showed that Eskom is refusing to litigate on R100-million of claims that a Deloitte & Touche investigation shows it is owed by several coal suppliers. These irregularities, which the Deloitte investigation showed amounted to unlawful, and probably illegal conduct, took place on a massive scale over a period of several years.

Statement issued by Sejamothopo Motau, MP, Democratic Alliance shadow minister of energy, September 13 2009

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