Ramaphosa the irresponsible

Sara Gon on our President's blame-shifting on the electricity crisis

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President Cyril Ramaphosa has a penchant for the homily and the platitude. His speeches are studded with banal views and, although expressed in plain language, they don’t convey very much.

Ramaphosa usually sounds resolute when announcing some ideologically suffused proposed legislation, or dissing whites. Legislation like that concerning expropriation without compensation reflects the African National Congress’s (ANC) regressive march backwards to the heyday of 1950s communism.

However, more in keeping with his amiable and beaming persona is his weekly letter, From the Desk of the President.

Thus, on Monday 9 December, he tells us: “When I visited Medupi power station for the first time two weeks ago, I was struck by how massive it is. It is one thing to be told in a briefing that, when completed, Medupi will be the fourth largest power stations (sic) of its kind in the world; but it is quite another thing to stand below its towering turbines.”

A sentence like this should precede a description of how effective it is and the marvels it can perform, but sadly not.

In 2014, former President Zuma appointed a “war room” to deal with the Eskom crisis. The chair of the “war room” was then Deputy President Ramaphosa. In three years as chair, Ramaphosa never visited Medupi.

Medupi is not, as Ramaphosa proclaims, a fitting symbol of the importance of our SoEs. Probably other than Eskom, none of “our” SoEs are particularly important. They could either be in private hands or not exist at all.

Ramaphosa blithely tells us: “The cost of building the power station has escalated dramatically since its building started, it is behind schedule and – with five of its six units now in commercial operation – it is not yet performing at the level it is expected to perform.

“The problems with the construction of Medupi and its twin’ Kusile account for much of the financial crisis at Eskom. There have been other factors, of course, not least of which are the effects of state capture, corruption, loss and shortage of essential skills and mismanagement.”

Ramaphosa runs these problems off his pen as if they are caused by some mysterious, malevolent and invisible force, rather than caused by him and his colleagues. There is no apology for the fact that everything that is wrong is the fault of the ANC and the ANC government, of both of which he is president.

Stephen Grootes noted on Daily Maverick that “… it should not be forgotten that at all times, the people who made the mistakes, the people who indulged in corruption, and the people who have created the deep crisis that we are in now, come from, and were protected by, South Africas very own ruling party, the ANC.”

In 2008, former president Thabo Mbeki said the government was taking “collective responsibility” for its failure to ignore Eskom’s warnings that resulted in load-shedding. This proved to be the forerunner of an oft-to-be-repeated but meaningless taking of collective responsibility by the ANC. When the ANC takes collective responsibility, no one takes responsibility.

Grootes reminds us of the ugly history of the power stations. In November 2007, symbolically just a month before our first load-shedding, Chancellor House (the ANC’s investment arm) received 25% of the local arm of Hitachi. Hitachi won the contracts to build the boilers for the power stations, worth about $5.6 billion.

As a result of a United States Securities and Exchange Commission investigation into corruption by Hitachi, the Commission described Chancellor House as “a front” for the ANC. This allowed the ANC to share in the profits from any power station contracts secured by Hitachi. Hitachi also agreed to give Chancellor House a "success fee" in the event that the contract awards were "substantially as a result" of Chancellor's efforts. In April and July 2008, Hitachi paid Chancellor House "success fees" totalling approximately $1 million.

Subsequently, a US court found that Hitachi had made improper payments to Chancellor House. The above is a summarised extract from the judgment against Hitachi.

Grootes gives a brief account of the damage done by the ‘deplorables’: Jacob Zuma, Lynne Brown, Ben Ngubane, Brian Molefe, Mosebenzi Zwane, the Guptas, Matshela Koko et al.

Crucially, Grootes reminds us that these people would have been deployed by the ANC’s deployment committee whose workings the ANC refuses to disclose. Ramaphosa chaired this committee from 2013 to 2017.

Back to Ramaphosa’s letter: “And yet, Medupi is impressive. Once the work to correct the problems with its design and construction is complete, it is expected to contribute around 4,700 megawatts into the national grid, producing enough power in a year to meet the electricity needs of more than a million people.”

Between Grootes’ article on the morning of 9 December and the early evening of the same day, Eskom went from Stage 4 load-shedding to an astonishing Stage 6.

On 11 December on Politicsweb, former deputy finance minister and NEC member, Mondli Gungubele reminds us that he was on the parliamentary inquiry into Eskom and that the committee “deliberately allowed the electricity supplier to have poor capacity. There was no intervention on wrongdoings”. Individuals dismantled functioning institutions “without providing alternative models”.

“It is us who messed up Eskom…It happened on our watch”. Gungubele says although it happened under the ANC’s watch, under Ramaphosa’s leadership the ANC would stabilise Eskom. “We can now be trusted.”

And what of minister of mineral resources and energy Gwede Mantashe? Only Mantashe has the authority to enter into agreements with private companies, which have installed generating capacity to sell into Eskom’s grid.

Mantashe says “he won’t be rushed”. Fittingly, on 10 December the Democratic Alliance called for Mantashe to be fired – he clearly is incapable of seeing the urgent need to act.*

Ramaphosa believes that our “suite of major state-owned enterprises” have great assets, a large and diverse cohort of skilled people, and solid track records. If they do have such cohorts there are either far too few of them or they’re being stymied by incompetent and/or corrupt superiors.

“Already, we have done much,” he goes on. “Soon after taking office in February last year, we took steps to strengthen governance and reinforce effective management at strategic SOEs. New boards have been appointed and executives with the requisite skills and experience have been put in place.” It is a very poor record to have spent two years changing everything but achieving less than nothing.

“Some of the problems at SOEs have been caused by outdated business models that are no longer fit for purpose. It is for this reason, for example, that Eskom is in the process of establishing three separate entities for generation, transmission and distribution. This will not only help Eskom overcome some of its financial and operational challenges, but it will contribute to a more efficient, cost-effective and sustainable energy sector.”

The reality is that the future unbundling of Eskom tells us nothing about what is being done now. The rest of the letter can be read here

The letter emanates from a president who lives in a smart city a long, long way from here. Ramaphosa has said that ongoing rotational power cuts are causing great harm to the economy and disrupting the lives of citizens. No kidding! Tell us something we don’t know!

* Mantashe announced (10 December) that short- and medium-term interventions to meet our energy demands and address electricity would be taken. These include steps to allow Independent Power Producers to come on stream sooner. This was an "an urgent and immediate task to ensure economic growth", he said.  Wakey, wakey!

Sara Gon is the head of strategic engagement at the IRR. If you like what you have just read, become a Friend of the IRR if you aren’t already one by SMSing your name to 32823 or clicking here. Each SMS costs R1.’ Terms & Conditions Apply.