Opinions

UNETHICAL LEADERSHIP AS THE SOURCE OF LOAD SHEDDING

Author: Sagoema Maredi

South Africa has been experiencing load shedding in the previous weeks and the recent rains have been blamed for this national blackout; however, it is a myth that the state-owned power utility – Eskom’s stage 6 load shedding was caused by the rainy weather conditions. If one remembers correctly it was on the 25th January 2008 where the country experienced what was to become the reality of what we now know as load shedding. “Black Friday” was a name given by the mining industry – where all of production (in the gold and platinum mines) came to a standstill for five days. Business together with households had to find alternative power so that they are able operate, and the result of this amounted a loss of billions of Rands, with the food industry losing stock and one life claimed during a theatre operation[1].

Looking at where South Africa comes from in terms of the supply of electricity, it is sad to see the state of electricity at the point it is in. In 1882 South Africa was one of the first countries in the world to take up electricity, in 1890s almost all of the cities had electricity coverage[2]. These were the best times for the energy sector.
[1].


The ‘White Paper on the Energy Policy of the Republic of South Africa’ published in December of 1998 was written with the sole purpose of reporting the government’s policy on the supply and demand phenomenon of energy in the years to come[3]. Thus, the analysis of the report recommended that Eskom needed to open up to the private sector, for competitive purposes and pricing, BEE investments and growing its capacity to try meet demand. The white paper envisaged that by 2007 all of Eskom’s surplus capacity of supplying the country with electricity would be used up, hence the need then (1998 going forward) was for Eskom to ensure that this would not be a reality.

2001 saw Eskom converted into a public company owned by the state[4]. With this came an increase of political interest in the board and executive positions and appointments where poor leadership was a hinderance to properly govern the power utility. It is reported by Professor Anton Eberhard and Catrina Godinho of the University of Cape Town’s Graduate School of Business that “R3 billion in irregular expenditure, revealed the devastating impact that weak and arguably corrupt governance has had on the institutional integrity and financial sustainability of South Africa’s most critical SOE (State Owned Enterprise)”[5]. It is evident that poor leadership and high political interest in the power utility has contributed to what we see and experience now as a load shedding.

Dr Maduna who served in the Minerals and Energy ministry when the White Paper on the Energy Policy of the Republic of South Africa was published in 1998 summarised how electricity affects the GDP of South Africa. With the manufacturing sector accounting 25% of the GDP and the mining industry 10% which both heavily rely on electricity to produce. Moreover, Maduna added that about 40% of electricity is consumed by industry[6]. It is without doubt that electricity serves as an important contributor to the growth of an economy.

At this stage with the appointment of the new Eskom CEO – André de Ruyter[7] it is the hope of every South African to see positive transformations in the governance of the power utility. What Eskom as needs, as  Matshela Koko[8] remarked, is “experienced leaders”[9].

[1] See: ‘Why the Lights Went Out: Reform in the South African Energy Sector’ http://www.mandelaschool.uct.ac.za/sites/default/files/image_tool/images/78/10%2Bcasestudy_eskom_final_july.pdf.

[2] See: Anton Eberhard, The Political Economy of Power Sector Reform in South Africa, Working Paper #6 (Revised), April 2004. First presented to the Political Economy of Power Market Reform conference convened by PESD at Stanford University, 19–20 February 2003.

[3] See: ‘White Paper on the Energy Policy of the Republic of South Africa’, 1998, in Department of Minerals and Energy.

[4]See: http://www.mandelaschool.uct.ac.za/sites/default/files/image_tool/images/78/10%2Bcasestudy_eskom_final_july.pdf.

[5]  See: ‘Eskom Inquiry Reference Book’ http://www.gsb.uct.ac.za/files/Eskom%20Enquiry%20Booklet%20Sept%202017.pdf.

[6] See: White Paper on the Energy Policy of the Republic of South Africa  http://www.energy.gov.za/files/policies/whitepaper_energypolicy_1998.pdf

[7] See his CV https://www.marketscreener.com/business-leaders/Andre-Marinus-de-Ruyter-0BYQVK-E/biography/.

[8] A long serving member and engineer of Eskom, who started his career fresh from varsity in the power utility and probably understands it better than anyone.

[9] See: https://www.iol.co.za/news/politics/eskom-has-inexperienced-leadership-says-matshela-koko-39076202.

By Sagoema Maredi


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