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Photo of Terence Creamer

29th November 2024

By: Terence Creamer
Creamer Media Editor

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It was fascinating to listen to Eskom chairperson Mteto Nyati outline, in a recent exchange with the Centre for Development and Enterprises’ Ann Bernstein, why he believed the latest turnaround campaign at Eskom had delivered where others had failed.

Government’s financial and political support, he said, had proved vital.

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This included the R250-billion debt-relief package, which provided the utility with the financial certainty it needed to carry out much-needed maintenance at its coal stations.

The political support, meanwhile, arose in the form of the exemptions that allowed Eskom to enter into relationships with the original manufacturers of the equipment in such dire need of repair. It also facilitated the entry of private experts working under the umbrella of the National Energy Crisis Committee.

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However, Nyati also highlighted a crucial internal shift, which led to the turnaround receiving overwhelming employee support.

This new dynamic was attributed to the recovery plan having been “co-created” by the board, management and staff. The “real problems” were identified, including the need to appoint the right people to the right positions and the importance of securing exemptions from policies standing in the way of implementation.

Also highlighted, however, was the emphasis on leadership and on developing a culture of accountability.

Nyati reflected on how accountability is undermined by a culture of automatic respect for authority. He reflected on how he has had to train himself to eschew such a culture by questioning authority and demanding that respect be earned.

In that spirit, some questions do arise about the approach the board and leadership are currently taking with regard to the role that Eskom should play in future, as well as in the transition to a restructured industry.

Nyati rightly highlighted Eskom’s potential advantages: it has a wealth of talent with a deep knowledge of the industry; it has assets that are crucial for immediate system stability and that provide an important bridge to a sustainable future industry; and it has new-found confidence in its abilities, owing to its recent successes in tackling loadshedding.

There is a risk, though, that those competitive advantages could be exploited in a way that entrenches practices that have no place in a future, sustainable industry.

South Africa is on a path to an industry structure where there is far less reliance on a single generator and where even households can contribute. Is it Eskom’s role to crowd out that opportunity or facilitate it?

If it is the latter, Eskom can no longer view itself primarily as an electricity generator, but also as a facilitator of a new competitive electricity sector for South Africa. It should, thus, not be blocking trading licenses, or seeking a special carve-out in areas such as gas-to-power.

If it is the latter, then the future is all about systems operation, resource planning and facilitating physical electricity trade through properly scaled and well-maintained transmission and distribution infrastructure, in addition to increased efficiency and reliability in generation.

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