Remove Jabu Mabuza from Eskom – NUMSA

Union asks who the acting CEO will report to, if not the chairperson, who is himself

NUMSA repeats the call for Jabu Mabuza to be removed from Eskom

4 August 2019

The National Union of Metalworkers of South Africa (NUMSA) is shocked that the minister of Public Enterprises Pravin Gordhan has appointed Mr. Jabu Mabuza to the positions of both Eskom board chairperson, and Acting Group CEO of the state owned entity. It is alarming especially in light of the dismal performance of the management team in the last financial year, where Eskom reported a loss of R20.7 billion.

NUMSA has consistently said that that the board and executive management team at Eskom are technically incompetent, and this has been proven to be correct. And this is why we repeat our demand that their dismal failure to lead and manage this strategic SOE means that Jabu Mabuza, together with the entire board and senior executive management of Eskom must be removed.

The outgoing GCEO Phakamani Hadebe confirmed this when he said “they were oblivious to underlying factors” which were at the heart of Eskom problems. They have always been clueless at resolving the problems affecting Eskom, which is why we welcome Phakamani Hadebe’s departure.

We are also questioning the legality of allowing the chairperson of the board to also hold the position of GCEO. We have to ask how Mr. Mabuza intends to operate as both Chairperson of Eskom, and Acting CEO. Does this mean he will be reporting to, and is accountable to himself? Surely it cannot be proper for the chairperson of the board to hold both these positions. We therefore do not believe that Mr. Mabuza is fit to hold this position as well, and we intend to seek legal advice on what our options are in such a situation.

Furthermore, Mabuza is not fit to chair the Eskom board because he is conflicted. It is Jabu Mabuza himself who disclosed in the Zondo State Capture Commission that he was appointed as Chairman of the Board of Eskom, despite having family business interests in Eskom, both in the boilers and supply of coal. This conflict of interest is another reason why he must be removed.

It seems to us that Mabuza has been appointed to this role, because he is one of the few executives trusted by this government to implement the mandate of restructuring Eskom to enable privatization. He is also trusted to continue defending and enriching the owners of the Independent Power Producer (IPP) program, at the at the expense of the working class majority in this country. Governments commitment to the IPP program is not in the interests of the power utility and the public at large.

It has already resulted in higher energy costs for the consumer and the hollowing out of Eskom. Its implementation means the closure of several coal fired power stations, which will result in the loss of at least one hundred thousand jobs in Mpumalanga. This catastrophe which has been engineered by the capitalist ANC government, will worsen the crisis of unemployment, poverty and inequality in our country because of jobs which will be lost along the value chain in the coal sector.

It is for this reason that we welcome news that the office of the Public Protector will be looking into the process which was followed in relation to this project and how it was endorsed. As NUMSA we remain vehemently opposed to IPP’s, and we even took the minister to court last year in March, in an attempt to interdict him from finalizing the remaining 27 IPP contracts.

We’ve been convinced that the real problem at Eskom is confronting escalating primary energy costs and the declining sales volumes. We find it unacceptable that Eskom deemed it fit to burn diesel to the tune of R6.5 billion to keep the lights on. In an electricity system that has twice the reserve margin required by the regulator, we think that this is a reflection of an incompetent leadership at Eskom.

We find it even more unacceptable, that increases in coal purchases at Eskom remain higher than 16%. We think that it is irresponsible for Eskom to purchase at a cost higher than what is allowed by the regulator. 

The impact of the IPP costs on Eskom’s bottom line is becoming more and more obvious and the narrative of a full cost pass through is nothing else but a ruse. This leadership of Eskom sees nothing wrong with the escalating primary energy costs and have done nothing to contain the primary energy cost. They have elected to restructure their business and the intention of this restructuring, is to isolate the system and market operator, with the sole intention of crowding in the private sector.

This is what is popularly known as resolving the structural problems of the economy. There has been very little focus by this leadership on increasing sales volumes but there has been a total focus on restructuring Eskom, to crowd in the private sector and do away with Eskom in its current form.

This is why we repeat the call for Pravin Gordhan to be fired as Minister of Public Enterprises because we believe he is at the center of the crisis at Eskom. He approved the cost overruns at Medupi and Kusile, which have contributed to the staggering levels of debt. He was Finance Minister at the time the construction costs were ballooning and he approved the payments. He is partly to blame for this disaster and therefore, should not be allowed to continue in his role as minister of Public Enterprises.

This government continues to lie to the working class and the poor of this country on the restructuring and unbundling of Eskom. To date, no consultation or discussion has taken place with Eskom management and workers on the nature and form of the restructuring which is due to take place at Eskom. The management is clearly implementing the strategy to restructure the SOE because workers are being redeployed to different parts of the business, but no explanations or reasons are given. It is clear to us that at the end of this process, Eskom will be privatized and thousands of jobs will be shed in the process.

NUMSA has consistently called for the boards of all SOE’s to be scrapped and reconstituted. The board should have representatives from labour, community organizations, business and government. The shenanigans at Eskom and other SOE’s are a clear indicator that this is the only way we can guarantee accountability and good governance.

The only weapon we have against this onslaught is to continue to mobilize the working class to defend Eskom and to continue the fight against unbundling and privatization. It is obvious that the Capitalist ANC government will continue to take decisions to further its own narrow political agenda. Only the working class, who are the creators of wealth in our economy, can save us from impending disaster

Aluta continua!

The struggle continues!

Issued by Irvin Jim, NUMSA General Secretary, 4 August 2019