The Eskom debacle

Douglas Gibson says Gordhan and Ramaphosa can’t wash their hands of responsibility for the SOE’s dire state

Is Minister Pravin Gordhan able to read a cashflow statement? And the President? This may sound like an odd, even an impertinent question when put to someone who served as the SARS Commissioner and as minister of Finance on two occasions, or to someone who is a very experienced and successful company director, apart from being exceedingly wealthy.

The question is appropriate because both have been involved with the Eskom disaster for many years and both have been in extremely responsible positions, not only in the Zuma past, but also now for the past year in the Ramaphosa present. Gordhan has been the minister responsible for Eskom in his capacity as minister of Public Enterprises. How can he – and the president – be so absurdly shocked and surprised in February 2019 by the fact that Eskom will go bust if not bailed out with enormous sums and huge guarantees by April?

In December 2014, President Zuma acted on the Eskom crisis. He did something which sounds strangely familiar today. He appointed his deputy, Cyril Ramaphosa, to chair a “war-room” to deal with the Eskom electricity crisis and to ensure co-ordination between the departments of Public Enterprises, Energy, National Treasury, Co-operative Governance and Traditional Affairs (Gordhan), Economic Development, Mineral Resources and Trade and Industry.

Ramaphosa was advised by a six-person advisory panel comprising high-level academics, finance and business and it interacted with stakeholders such as BUS and AMEU.

Was this just window-dressing to keep the public quiet or did the war-room do anything or achieve anything? If it did, why is Eskom now on its last legs? Pravin Gordhan was a member of that same war-room and apart from that he had been the minister of Finance twice during Eskom’s long decline. How could he possibly be ignorant of what was going on? Has he not even once looked at the Eskom cashflow statement which would have shown immediately that this state-owned enterprise, once the jewel of South Africa, had been run into the ground under decades of ineptitude, corruption and appalling mismanagement?

In response to the crisis, the president has told South Africa that there is no quick fix. He has appointed the deputy president, David Mabuza, to head a cabinet committee to deal with the crisis on a daily basis. At least they have refrained from calling it a “war-room.” That would have been too deeply cynical. Members of this cabinet committee include Public Enterprises Minister Pravin Gordhan, Energy Minister Jeff Radebe, Transport Minister Blade Nzimande and Police Minister Bheki Cele. Quite how they are going to run a multi-billion Rand loss-making business and keep the lights on when most of the members of the committee are entirely ignorant and inexperienced about running a business, should make for interesting viewing.

Because of the imminent election, the president has had to promise that the bloated staff complement (up from 32000 to 48000 in ten years while producing less electricity than ten years ago) will not be reduced in any meaningful way. He has also promised that Eskom will not be privatised (the Communists and the unionists wouldn’t like it). Apart from the so-called “culture of non-payment” being disapproved of, the president has not said that the lights will be switched off for the non-payers, now having amassed a debt of R30billion. If that were done, there would undoubtedly be electoral consequences, the fruit of many years of permitting non-payment, even by many well-able to afford to pay.

In most constitutional democracies a minister like Pravin Gordhan would be expected to resign and accept responsibility for his inaction, at least over the past year, if not over the previous five years. Most governments would not be able to survive a crisis like the self-made Eskom crisis and the dangers it poses to our country and its economy. It will be interesting to see what the voters make of all this in the election on 8th May.

Douglas Gibson is a former opposition chief whip and a former ambassador to Thailand. His website is douglasgibsonsouthafrica.com.

This article first appeared in The Star newspaper.