REVIVING ESKOM
The new board Eskom will focus on multiple aspects to bring it to financial sustainability
Photo by: Creamer Media
In its presentation to Parliament last month, State-owned power utility Eskom mentioned that it would be dealing with a number of issues within the utility relating to governance, ethics and accountability as well as improving liquidity to ensure financial sustainability.
Presented on April 18, Eskom mentioned that the new board – which assumed its role in January – was continuing to address issues internally pertaining to governance, ethics and accountability.
When the board assumed its role, there were seven executives who were facing allegations of corruption or other forms of serious misconduct. The board immediately took steps to ensure all implicated executives were properly and swiftly subjected to a full disciplinary process to properly test the strength of the allegations against them and allow them to put up a defence against such allegations.
On April 24, Eskom released a statement where it indicated that it had appointed an independent chairperson in Tim Bruinders to chair a disciplinary hearing convened to consider disciplinary charges levelled against Abram Masango, who was found not guilty on all charges.
Masango was placed on suspension on November 15 last year. He was group capital executive at the time of his suspension. The charges levelled against Masango arose from a forensic investigation initiated in 2017. The draft forensic report, issued in late January, made allegations of serious misconduct against Masango.
The new board swiftly commenced with the disciplinary process to ensure that these serious charges were subjected to a proper enquiry. Masango was represented by senior counsel at the hearing which was held over four days in March and April.
This approach is in line with the new board’s efforts to ensure due process is followed when allegations of serious misconduct are levelled against employees, including executives, and is central to the new board’s commitment to rooting out corruption within Eskom and implementing an effective turnaround strategy to restore investor confidence.
In February, Eskom signed a R20-billion short-term credit facility with a consortium of local and international banks. The government guaranteed facility will form part of the financing of Eskom’s current capital expenditure programme.
At the time, Eskom interim group CE Phakamani Hadebe said the utility viewed the successful execution of this facility as a demonstration of the financial markets’ confidence in Eskom’s turnaround strategy.
“We are cognisant of the challenges that are still ahead for the business and we are committed to ensuring that we expediently transition Eskom’s operational and financial profile to adequate standards. Eskom remains a critical enabler for South Africa’s economic growth and it is critical that we attain maximum operational efficiency for the business to avoid negatively impacting on the macro-environment.”
Eskom acting COO Calib Cassim mentioned in the same statement that the facility, with the suite of banks, reiterates the renewed willingness by financial markets to engage with Eskom. The funding provides Eskom with sufficient liquidity to allow the company time to continue resolving its governance-related issues and enables Eskom to recommence with its normal funding programme required to execute the 2018/19 financial year funding plan.
Eskom reiterated this during its presentation to Parliament when it mentioned that it plans to improve liquidity and ensure financial sustainability, including ensuring that its funding plan is realised.