Eskom board chairman resigns – presidency

Ramaphosa under pressure over Eskom crisis.
Jabu Mabuza resigns. Image: Moneyweb

The chairman of struggling state-owned South African utility Eskom resigned on Friday after failing to avert power cuts over the Christmas and New Year public holidays.

President Cyril Ramaphosa’s office said the government would soon announce a reconfigured Eskom board of directors with a mixture of experience in the electricity industry, engineering and corporate governance.

Jabu Mabuza’s resignation comes after Eskom implemented severe nationwide power cuts in several bursts last year and sporadically this week despite low electricity demand when many businesses and factories were closed for the holidays.

Read: Brace for lots more load shedding

Cosatu calls for removal of Eskom board, Gordhan

The power cuts have pushed Africa’s most industrialised economy to the brink of recession and piled pressure on Ramaphosa, who came to power with a pledge to revive investor confidence and lift economic growth.

Eskom officials told Ramaphosa at the company’s headquarters in Johannesburg last month that there would be no power cuts from mid-December until mid-January. Ramaphosa then told journalists that there needed to be greater accountability for Eskom’s failings.

The company supplies more than 90% of South Africa’s power, but its creaking fleet of coal-fired plants struggle to meet electricity demand.

At 1830 local time more than 12 700 megawatts (MW) of its 44 000 MW nominal generating capacity were offline because of plant breakdowns.

Eskom executives have blamed a lack of critical mid-life maintenance under previous management and analysts say the government needs to procure more generating capacity fast.

Recruitment concern 

Ramaphosa told members of his African National Congress (ANC) party at an event to mark the governing party’s 108th anniversary that Mabuza’s departure was a “sad moment”.

“Addressing and overcoming the crisis at Eskom necessitates that the board be strengthened,” an ANC statement said.

Peter Attard Montalto, head of capital markets research at Intellidex, said the chairman’s sudden departure was a concern.

“It is far from clear who a replacement would be, given so many suitable people don’t want the job,” he said.

Mabuza was appointed to lead the Eskom board shortly after Ramaphosa won the ANC leadership in December 2017.

His appointment was intended to help to halt a financial and operational crisis. But under his watch the company’s debts climbed to more than R450 billion and power cuts escalated.

Mabuza’s resignation follows that of Phakamani Hadebe as chief executive last year. Hadebe cited health reasons for his decision to leave, but sources told Reuters at the time that he also felt frustrated at being excluded from important decisions affecting the utility.

Eskom’s new CEO, Andre de Ruyter, took up his post this week and will oversee a government plan to split the company into three units to make it more efficient.

The company said on Friday that power cuts would stop at 11pm on Friday before resuming at 9am on Saturday.

Below is the statement from the presidency:

PRESIDENT RAMAPHOSA NOTES RESIGNATION OF ESKOM CHAIR MR JABU MABUZA
 
President Cyril Ramaphosa has noted the resignation of Mr Jabu Mabuza as member and Chairperson of the Board of Eskom Limited. 
 
Mr Mabuza tendered his resignation today, Friday 10 January 2020. In his resignation letter Mr Mabuza apologised for Eskom’s inability to meet the commitment it made to the President, the Deputy President and the relevant Ministers at a meeting on 11 December 2019 to avoid load shedding over this period.
 
At this meeting, Eskom presented plans to ensure that the risk of loadshedding would be eliminated during the holiday period until 13 January 2020. Eskom also outlined the risks affecting the national grid.
 
As the Minister assigned responsibility for Eskom, Public Enterprises Minister Pravin Gordhan has accepted Mr Mabuza’s resignation. President Ramaphosa has expressed his gratitude to Mr Mabuza for serving Eskom and the nation during a challenging period and has commended Mr Mabuza for taking responsibility and accepting accountability for events under his leadership.
 
Government continues to support the measures being taken by Eskom to restore reliable electricity supply as a matter of priority, and is proceeding with measures to introduce new generation capacity – including self-generation – in the shortest possible time.
 
In the wake of Mr Mabuza’s resignation, Government will soon announce a re-configured Eskom board with the appropriate mix of electricity industry, engineering and corporate governance experience.
 
The President wishes Mabuza well in his future endeavours and his existing leadership roles in various sectors of the economy.
 
ISSUED BY THE PRESIDENCY OF THE REPUBLIC OF SOUTH AFRICA
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One small step for the ANC, one giant leap for accountability!

May I ask why you feel positive about this?

Because the anc does not have a exemplary record when it comes to accountability.

Because it is another piece of evidence that Ramaphosa is slowly moving in the direction of a market economy, away from communism. There was zero accountability in the ANC, up to now. “The accountability lies with the collective” – this is ANC policy. The president himself said that nobody is responsible for the disaster at Eskom and Prasa. He said that all of us, as a collective, should accept the responsibility. This mindset of unaccountability is highly destructive, as we know.

A market economy stands in contrast with a centrally directed, or command economy. The collapse of the SOE’s and municipalities under ANC control, as well as the dire state of the entire economy, prove that the command economy leads to ruin.

The president is moving towards privatisation, and holding people accountable is the hallmark of private enterprise. The means of production are in the hands of the “collective” at the moment. This implies that plunder and corruption will continue until the resources are depleted. Privatisation puts the resources under control of people with skin in the game, who will accept the responsibility to protect and utilize those resources for the benefit of the consumers.

Accountability is very unlike the ANC. “The president is talking left, but moving right.” This is good for the economy, but he is way too slow. He needs to move with speed. He must get rid of the disastrous Gwede Communist Manatshe.

One thing I enjoy about Cyril is that since he has been in charge, the frequency of toxic political commentary across the SA spectrum has been reduced.

It seems that politicians are realizing after 26 years that they need to start taking their jobs and constituencies seriously.

Another BEE appointed cadre gone sour. Hiw about paying back the millions in salary he got for nothing.

I wonder if Mr.Mabuza is not perhaps scared of the New Guy?
Perhaps he was looking for a way out?

Not true. Jabu is one of the incredibly few ‘good guys’ in the government. His loss is no cause for celebration. Instead it is a reflection of just how toxic the situation has become.

Tend to agree with you, I do not think he is a bad character. He did quite well at Telkom together with CEO Sipho Maseko. They inserted a lot of common business sense in that company, still 57% owned by Gov.
Telkom does not request bail outs.
He might not have had specific knowledge or experience in the energy sector. Eskom is just too FUBAR.

He did nothing. He died not make Eskom better. Good riddance.

Maybe he is a decent person and not afraid to admit a mistake or failure. Not afraid to stand his ground and try something new later.

That is how good business people and leaders operate.

Maybe Eskom’s problems are not normal business related.

Engineering companies are run by engineers, where are the engineers?

Agree Chris : the new CEO came in, said what he wants to tackle (hopefully starting with a review of all the coal and diesel and construction contracts), the board backed CEO, the Chair disagreed, the Chair resigns because probably the shareholder backed the CEO and Board.

who cares…he did zero..CR appointed Mabuza to run the war room..he did nothing..zero meetings from beginning of December…I nominate my dog as a board member…he will also do nothing

I concur with Deon, if I may?

Deon : Is your Dog BEE compliant ?? There are enough dogs there already !!

The kennels are already overflowing at Eskom.

My guess is that the great Jabu did not do nothing; I reckon he spent his day scheming how more loot could be raked off by himself and his ANC chums. For this he will get a handsome package.

He definitely did zero to improve Eksdom’s performance.

Somehow Queens song “Another One bites the dust” reverberates through my mind when i read about anyone related to Eskom.
As much as they try, they cannot pull this Elephant out of the mud, the same Trumpet thats always in the room

Perhaps certain incompetent Ministers and Civil Servants should join Eskom. It’s a foregone conclusion that they will resign after a while

Gee – Is that why our lights stayed on last night ???

Exemplary. When you see you cant fix it just go.

Some others that has been at this ESKOM thing now for years without success. Is Pravin and CR himself.

Just go. Someone else needs to fix this. You cant.

They had the right guy in Bobby Godsell. The problem was the politicians and their corruption and inteference.
o’Jabu did nothing.

Oh dear. This is the end, when management has now given up. Perhaps it’ll be rolled into administration, or just turned off.

and if the minister just allow the greenies to add energy to the grit all will be fine…NO…ANC will loose coal contracts…a handfull is causing all the trouble for the other 99.5% for MONEY…and it is allowed by CR , Cosatu, ANC…greed is good

But will the new man wear a silly hat too? That’s the real question here …

his very appearance is cause for alarm

End of comments.

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