Brown moves to stabilise Eskom leadership with appointment of Molefe as acting CEO

17th April 2015 By: Terence Creamer - Creamer Media Editor

Brown moves to stabilise Eskom leadership with appointment of Molefe as acting CEO

Minister Lynne Brown (in foreground) with Brian Molefe (far left) and Deputy Minister Bulelani Magwanishe at the Eskom announcement
Photo by: Duane Daws

Public Enterprises Minister Lynne Brown announced that Transnet's Brian Molefe had been seconded as acting CEO of Eskom, with immediate effect.

Brown said the appointment formed part of government efforts to stabilise the Eskom leadership, following the suspension of four senior executives, including CEO Tshediso Matona.

Speaking at Megawatt Park on Friday, Brown indicated that, although the suspensions of Matona and the other executives were due to be lifted in less than three months, she wanted Molefe to remain at Eskom for at least a year to oversee a turnaround process, as he had done at both Transnet and the Public Investment Corporation.

Three candidates had been identified to replace Molefe at Transnet and the appointment of an acting CEO of the freight logistics utility should be made known in the coming week.

Eskom interim CEO Zethembe Khoza would resume his role as a nonexecutive director on the power utility's board.

Sharing a platform with Brown at the briefing, Molefe said his first priority would be to assess what could be done to minimise the ongoing load-shedding. Eskom was implementing stage two load-shedding at the time of the announcement, having vacillated between stage one and three throughout the week, beginning Sunday, April 11.

The immediate focus would be on improving the efficiency of the coal fleet, the poor performance of which was largely to blame for the fact that Eskom was unable to keep the lights on. Unplanned outages had risen precipitously since 2010, with average plant availability falling to the low 70% level from well over 80% five years ago.

In the medium-term, Molefe would focus on introducing alternative energy sources into South Africa's coal-heavy mix, while still optimising South Africa's extensive coal resources, with the country said to have a 200-year resource in the ground.

Asked whether he was prepared to take up the position on a permanent basis, Molefe said: "We will deal with the matter when the time is right."

Brown stressed that she had no intention of "unfairly discriminating" against Matona, who was only appointed to the position in late 2014. But she needed the skills and experience that Molefe possessed immediately. "I need that support now," she said, reporting that Molefe's secondment had been canvassed and endorsed by President Jacob Zuma, Deputy President Cyril Ramaphosa and the Eskom and Transnet boards.

She also did not discount Molefe and Matona working together for a period. "I would like [Molefe], for the full year, to actually work in turning around Eskom. And if that means with Mr. Matona beyond three months time, we will find another title for him."

Transnet chairperson Linda Mabaso confirmed that the board had been consulted and described Molefe’s appointment as part of a strategy "to address what is currently inarguably the country’s biggest challenge".

Brown also announced that the terms of reference of the so-called "deep dive" probe of Eskom's finances, maintenance protocols, diesel costs and coal supply and costs had been finalised by the board. The four executives were suspended in mid-March in order for the investigation to proceed on an "unfettered" basis.

The delay in finalising the terms of reference had arisen as a result of former chairperson Zola Tsotsi, who resigned on March 31, having sought to draft the terms alone. He had also not followed correct procedure in appointing Nick Linnell to oversee the investigation.

Subsequent to Tsotsi's resignation, the board had agree to the terms and had sought to meet Brown's stipulation that the probe be conducted by a firm that had international experience and was fully independent of Eskom.

Following a short-listing process, global law firm Dentons had been appointed to lead the inquiry.