Eskom CEO quits: why finding a new head for South Africa’s struggling power utility won’t end the blackouts

An employee makes fermentation notes by torchlight during a power outage period at a brewery in Cape Town, South Africa. Photographer: Dwayne Senior/Bloomberg via Getty Images

By David Richard Walwyn

For a multitude of reasons, Eskom CEO Andre de Ruyter’s resignation is a huge setback for the state-owned power utility and South Africa. It comes at a time when the utility, which produces 95% of the electricity used in the country, needs stable leadership.

Stability is critical for success in the three key transitions Eskom needs to navigate. It needs to turn back the tide of state capture and deliver a reliable electricity supply. It must reorganise the group into generation, distribution and transmission, and it must reduce its carbon footprint.

Under De Ruyter’s leadership, some progress has been made in all three areas. Now, the successful prosecution of those responsible for corruption, unbundling of Eskom, and the transformation of generating units into an integrated and environmentally sustainable organisation are under severe threat.

De Ruyter’s resignation comes as South Africa’s energy consumers face the worst scheduled power cuts ever, beyond even their wildest imaginings. Eskom operates a fleet of 15 coal-fired power stations, one nuclear facility, 4 gas turbines and 7 pumped storage/hydro-electric stations. Most of the coal stations are down for emergency repairs, and there seems to be no end in sight to escalating rolling blackouts.

De Ruyter’s announcement came a few days after the country was told that the renewable energy programme, a necessary part of South Africa’s energy future and a low-cost solution to the energy shortfall, will only award the solar tenders of Bid Window 6, adding a miserable 860 MW to the energy grid. This is instead of the 5,200 MW promised by President Cyril Ramaphosa in his Electricity Action Plan delivered in July 2022.

That is 20% of what was promised and 5% of what the country needed, based on the 2019 Integrated Resource Plan.

All of this shows that De Ruyter’s resignation is no reflection on the ability – or inability – of an individual to deal with the electricity crisis. Whoever replaces him will confront the many systemic or structural issues in the company – and the country.

Behind the resignation

De Ruyter would not have had to think long about his resignation. At the top of my list is a lack of political support, with Energy Minister Gwede Mantashe accusing Eskom of treason, and Public Enterprises Minister Pravin Gordhan failing to come to his defence or respect his authority.

No CEO of a state-owned entity, particularly an entity under siege by criminals, can operate effectively without political support, regardless of the loyalty of the management team or the sentiments of the board.

My second reason for asserting that De Ruyter wouldn’t have to think for long about his decision is that Eskom has lost control of its power stations to criminal elements and “rent-seekers”, who engage in purposeful malfunction and sabotage to earn higher maintenance and other fees from the utility. Drain plugs removed from motor housings, cables cut, theft of coal and diesel, and death threats against station managers, are all examples from a long list of cases which are awaiting police investigation.

Moreover, law enforcement is doing little to control crime. There have been no convictions.

My final reason is that De Ruyter’s vision for a future, greener Eskom is not shared by his board or his ministers. South Africans need to be reminded of the present status of Eskom’s environmental emissions.

Eskom is the largest sulphur dioxide emitter in the world, exceeding the total emissions of China and the US combined. Similarly, the utility’s carbon emissions are about 200 million tonnes per year, representing 40% of South Africa’s total emissions.

All of Eskom’s 15 power stations are in breach of the Minimum Emission Standard, and Eskom has been told repeatedly by the Department of Forestry, Fisheries and Environment to scale down the emissions or shut its power stations.

De Ruyter has been attempting to address the question of energy sustainability by closing and repurposing old coal-based power plants, unbundling the company, and raising funds for the just transition and decarbonisation of electricity generation.

These efforts are constantly being undermined by Mantashe and the coal lobby.

A future of power cuts

The CEO’s departure signals a deepening crisis in terms of scheduled power cuts. The country is now suffering regular rolling blackouts and must adapt to a routine energy availability factor of 50% to 55%, leaving a generation shortfall of 4 GW to 5 GW. Since only 66% of Eskom’s demand side is subject to power cuts – the national key points which consume 33% of the total demand are untouched by load-shedding – this means 6 to 8 hours per day of no power for the average consumer.

I have argued previously that rolling blackouts were driving large-scale customers away from the national grid into cheaper and more reliable options. Although there is no definitive data available, customers who are reliant on power for critical manufacturing processes, and functions such as refrigeration, are buying solar panels as fast as they can find them.

Infrastructure investment of this nature is a 20-year decision – that’s how long it takes for an investment of this nature to pay. This means that large users will not be returning to the grid any time soon.

Based on the present trends, my prediction is that within two years, the customer base will contract by 30%. Of the 18 GW customer base subject to power cuts, at least one-half will find alternative energy supplies, either directly or through private utility companies.

What needs to be done

Top of my list is to cleanse the sector of the “energy Mafia” which profits from sabotage and rent-seeking and regain control of the captured power stations. The new CEO will have to ensure that the “special law enforcement team to help Eskom in confronting crime and corruption”, about which President Ramaphosa spoke so emphatically in July 2022, does its job.

The second task is to fully commission Medupi and Kusile, which have cost the country dearly and now need to operate at the design capacity.

This task will require further capital expenditure, which Eskom does not have, and the National Energy Regulator of South Africa is unlikely to provide the funds in the form of a high electricity tariff. Both stations are critical to the longer-term stability of the grid, at least until 2050.

Simultaneous to restoring the coal fleet, the new CEO must focus on the renewable energy programme, which, at this point, is being hindered by limitations in transmission. Eskom needs new grid infrastructure to bring additional wind and solar energy online, and implement the determinations of the renewable energy programme, despite political interference and the power of the coal lobby.

It is a tragedy to see the departure of a high-calibre team, including Jan Oberholzer, the Chief Operating Officer, and the General Executive for Generation, Rhulani Mathebula, that made earnest efforts to keep the lights on. Now, it is up to the board to find courageous and energetic replacements who can regain the country’s confidence in the ability of this government to run a state-owned utility.

The track record is not inspiring. Other big state utilities have been hollowed out by bad and corrupt management. These include the transport utility Prasa, South African Airways and the South African Post Office.

I leave you to draw your own conclusion.

Eskom needs a new management team, this is clear. But the country also needs new leadership.

David Richard Walwyn is the Professor of Technology Management at the University of Pretoria

This article is from The Conversation

Is South Africa better off with or without Cyril Ramaphosa?

A man speaks at a podium with his back to two South African flags.
President Cyril Ramaphosa. GCIS/Flickr

By Thapelo Tselapedi

President Cyril Ramaphosa came to the helm of South Africa’s governing party, the African National Congress (ANC) in 2017 on an anti-corruption, or anti-state capture, platform. The ANC’s 54th elective conference gave him a mandate of renewing the party, and simultaneously reversing the state capture phenomenon that had characterised much of the country for10 years under his predecessor Jacob Zuma.

But, now, he himself has been caught up in controversy over the theft of thousands of American dollars allegedly kept in contravention of foreign exchange rules at his Phala Phala farm in Limpopo in 2020. He also allegedly failed to properly report the theft to the police.

This sparked an attempt to have him impeached for allegedly violating the country’s constitution. But, the ANC’s overwhelming majority in parliament saw the impeachment motion being defeated.

This has led to many to ask whether the country would be better off with or without Ramaphosa.

This is not an easy question. But it is one that has been on the minds of many in the country since the eruption in June of the Phala Phala scandal.

Given that South Africa runs a party political system at a national level, Ramaphosa emerges through the organizational culture of the governing ANC. The party, specifically its successive leadership after the 2007 Polokwane conference, has presided over the weakening of state institutions and a general collapse of state capacity.

These have eroded social cohesion in South African society as seen by accelerated levels of inequality, xenophobia, and ethnic chauvinism. To ask, therefore, whether South Africa would be better off with or without Ramaphosa is to also ask whether the country would be better off without the ANC.

For a period, the ANC represented the aspirations of many black people in reversing the political and economic design of colonialism and apartheid. To this extent, it can be said to have encompassed the South African nation. But it has become too inward-looking, at the expense of the development aspirations of the nation it claims to lead.

Interestingly Ramaphosa straddles these transitions of the ANC. At the beginning of the democratic dispensation in 1994, as a trade unionist, he was an important architect of the country’s constitutional framework. But, now as president of both the party and the republic, he’s embroiled in a scandal over his private business interests. 

It’s an untenable position to be in given the anti-corruption ticket that catapulted him to the helm of the party.

I’ve been researching and observing the ANC and its governance performance over 15 years. My view on these questions is that given the organizational culture that comes with the ANC, and its impact on both government and on South African society, the country would indeed be better off without Ramaphosa. This is regardless of his anti-corruption campaign which has, in any case, been weakened by Phala Phala

Of Phala Phala and the ANC

Given that the Phala Phala matter weakens his anti-corruption campaign, the party can either save the president, as it did when it voted this week against tabling the report of the parliamentary panel on Phala Phala for discussion. Or, it can hang him out to dry, thus beginning a series of events that weakens the electoral fortunes of the party altogether. 

The decision to save him is, of course, premised on the idea that the South African “nation” is inseparable from the ANC. And that equally, the ANC is inseparable from the state. These assumptions increasingly don’t hold true in the country. Voters, especially in urban South Africa, are diversifying their votes.

I agree with the Director of the New South Institute, Ivor Chipkin when he says:.

the ANC is not the nation…the party is not the state {and} institution matter more than individuals.

It has become increasingly clear that the country needs to start thinking of life without the ANC in charge. And that coalitions, albeit unstable in the immediate run, might be desirable to avoid the cliff edge that South Africa stands on.

Looking forward

I think that the ANC will continue to be a strong political force in the foreseeable future, even though it has weakened in successive election at local, provincial and national level. 

There are now real prospects that the party will poll just above 50% needed to form a national government in 2024. This puts the prospect of a national coalition government within view. 

The ANC should now show leadership by providing the necessary architecture – including new laws and regulations – to manage coalitions so that they can serve the country well. 

This would complement the recent amendment of the Electoral Act enabling independent candidates to run for elections at national and provincial level.

Of course, this possibility is not without its weakness: legislative access or easier entry for independent candidates to contest elections is a zero-sum game for the ANC. But the development of South Africa requires not the renewal of the ANC, but the enablement of coalitions. 

Coalitions are a necessary part of diversifying South Africa’s political culture. This is not about bringing contestation for its own sake, but to find a party political culture that aligns with the country’s constitutional framework. 

The future of South Africa hangs in the balance. The country can either continue on its current downward spiral, with a growing brain drain, or it can change direction to an upward development trajectory. 

Either way, this is about much more than the ANC. 

Too much time has been spent discussing the societal spillovers from the party’s organizational and intellectual problems.

Thapelo Tselapedi is a Politics lecturer at Rhodes University

This article is from The Conversation

Durban coastline: sewage-polluted beaches pose threat to holidaymakers and the environment

Thousands of New Year party revellers and holidaymakers on North Pier Beach in 2016. Rajesh Jantilal/AFP via Getty Images

By Anja du Plessis

Large numbers of businesses in eThekwini on South Africa’s eastern seaboard – which includes the port city of Durban – rely heavily on tourism. It’s a popular holiday destination, only six hours by road from Johannesburg. Millions of people living inland head to the warm coastline over the country’s extended December/January school holiday break. But maybe not this year. As Anja du Plessis explains, the waters off many of the beaches along the Durban coastline aren’t safe to swim in. She explains what’s happened, and why.

What’s the state of the beaches on the eThekwini seafront?

The city’s beaches are facing an ongoing sewage crisis. Many have been closed along the Durban coastline

From recorded water quality results, it is quite clear that most of the eThekwini municipality beaches are currently not safe for public and recreational activities. 

Most beaches have critical levels of Escherichia coli. (E. coli). This is a bacteria found in the intestines of healthy people and animals. But high levels of E. coli in water pose a significant threat to human health as well as aquatic and marine environments. The global and South African acceptable standard for E. coli in marine water is 500 counts/100ml. Most beaches along Durban’s coastline have critical E. coli levels well above this level and should be considered a public health hazard. 

Only three of the nine sampled beaches along the city’s extended coastline have acceptable levels of E. coli. They are uShaka, South and Westbrook Main beaches. 

Of major concern is that some beaches have been opened for swimming despite critical E. coli levels being recorded. The beaches of concern include Point, North, Battery, Country Club and Umhlanga Bronze beaches. 

E. coli levels in the Umgeni River are also a major public health hazard. Levels range up to over 24 million counts/100ml in the case of Northern Works

From the data provided, the decision to open some beaches for swimming should be revisited as it poses a major human health hazard due to critical E. coli levels. 

I have been conducting research on water quality trends in the area for more than 12 years. Results show a decrease in water quality and compliance over the past two decades

Examples of the decline include increased algal blooms that have led to large-scale fish deaths (especially in the Umgeni River) and the closure of beaches. 

About 80% of the pollution in the sea originates on land. Various contaminants (chemicals, nutrients, litter, heavy metals and other toxic substances) are carried by streams and rivers from different land use activities such as farms, industries and urban areas to bays and harbours and finally out to sea. 

The magnitude and frequency of pollution can make rivers and ocean water unsafe for humans. It also leads to large-scale environmental destruction such as fish deaths. 

The ongoing and escalating sewage pollution in the eThekwini municipality is an example of how continued sewage pollution, chemical spills as well as poor water governance and management can lead to widespread environmental degradation and human health hazards. 

What are the causes?

The state of the municipality, specifically in terms of its ability to provide informed water governance and reliable service delivery to its residents and businesses, has been declining at a steady rate over the past two decades. This reached a crisis point in mid-2022 when the majority of beaches were closed, with few being safe for recreational activities. 

The ageing water infrastructure has steadily decayed due to non-maintenance, lack of human capacity and financial resources, poor water governance and delayed – or no – action to address the deposition of sewage into various water courses such as the Umgeni River, and ultimately out to sea. 

Major floods in April 2022 made the already dire situation worse. The floods damaged water infrastructure and wastewater treatment works, threatening water supply. After the floods, 80% of the drinking water network was out of order.

The floods caused immense sewage pollution coinciding with another massive death of fish at the Umgeni River mouth. In August 2022, large-scale fish deaths were again recorded in the Isipingo Beach lagoon, with more aquatic deaths recorded at the Umgeni River. E. coli was once again determined to be the primary culprit, with major effects on aquatic life and ecosystems.

But the April floods aren’t the sole cause of the current sewage crisis. The failure of water infrastructure and wastewater treatment works has been an ongoing issue over the past two decades, escalating every year. 

Vandalism has led to breakdowns and non-functioning of pumps. Some sewage pump stations don’t have a second back-up pump. In the event of the first pump failing – or in the event of prolonged power outages or consistent escalating blackouts – sewage will overflow. 

The closure of beaches within the eThekwini municipality is not new. Beaches were closed over the holiday season in December 2021 due to major sewage pollution of the Umgeni River. 

Partially treated human waste was, and still is, being deposited into the Umgeni River from a municipal outlet pipe located close to wastewater treatment works. 

What’s the impact been?

There’s a growing risk of major human health hazards and risks, specifically cholera, hepatitis and other waterborne diseases transmitted via exposure to sewage bacteria and pathogens in affected rivers as well as the ocean.

The very low level of compliance of microbiological quality (most are on a critical level) as well as continued flow of sewage into rivers, streams and the ocean is of major concern. It affects public health and aquatic ecosystems and causes major financial losses, especially for the tourism sector.

For the moment, the quality of potable water (drinking water) within the eThekwini municipality is acceptable, with 99% compliance. If compliance falls below 95%, and no precautions are taken, the increased concentrations of bacterial or pathogenic concentrations will lead to an increased risk of disease and possible outbreaks of waterborne diseases. 

Where do we go from here?

The sewage crisis cannot be solved overnight as it is a legacy issue. The following steps need to be taken to begin to reverse the sitaution:

  • The money supplied to the municipality to address the aged water infrastructure, poorly and non-functioning wastewater treatment works and other major pollution issues should be monitored by an independent body to ensure that these funds are not misappropriated. 
  • Frequent monitoring of water quality needs to continue. The results, especially for E. coli, should be published and made available to keep the public informed on the current state of its major rivers and beaches.
  • The lack of accountability, alleged misappropriation of funds, delayed or no action as well as poor water governance should be investigated, addressed and improved upon. 
  • Public-private partnerships should be considered to address the continued sewage crisis. The estimated cost of infrastructure damage across the province has been put at R25 billion (still increasing), and will require productive partnerships and investments.

Finally, beach goers should make sure they’re aware of most recent published water quality results. They should try to avoid beaches that are officially closed and determine which beaches are suitable to use based on published water quality results.

Anja du Plessis is Associate Professor and Research Specialist in Water Resource Management, University of South Africa

This article is from The Conversation

What is RET and what does it want? The Radical Economic Transformation faction in South Africa explained

Loyalists of the ANC’s Radical Economic Transformation (RET) at the Olive Convention Centre in Durban. Rajesh Jantilal/AFP via Getty Images
Loyalists of the ANC’s Radical Economic Transformation (RET) at the Olive Convention Centre in Durban. Rajesh Jantilal/AFP via Getty Images

By Roger Southall

It has been standard for some years, in any analysis of South Africa’s governing party, the African National Congress (ANC), to refer to the “radical economic transformation” (RET) faction. Yet, there has been little serious analysis of what it is. 

The RET is difficult to define. It has no clear shape, leadership, membership, rules or policies. It is rather an aggregation of the aggrieved and aspirant within the ANC, linked by a set of broadly shared attitudes towards the state and power. Nor, in conventional terms, is the faction particularly “radical”. The “economic transformation” it seeks is the displacement of white racial domination, rather than the overturn of capitalism.

Despite its vagueness, the RET has become central to the contemporary ANC. It is destined to remain a powerful bloc within the party, and under President Cyril Ramaphosa, a constant constraint on his leadership and any effort to reform the economy and promote clean governance. For that reason, it needs to be understood.

Growth and composition

Its origins lie in the “tsunami wave” which led to the defeat of Thabo Mbeki as ANC president in 2007 by Jacob Zuma, followed by Zuma’s elevation as state president in 2009. During Zuma’s presidency (9 May 2009 – 14 February 2018), the RET faction overlapped heavily with his support base, which was drawn heavily from KwaZulu-Natal, his home province. Yet it was also closely aligned to ANC heavyweights in the other provinces, notably those dominated by the then “premier league” – provincial premiers in three mainly rural provinces Mpumalanga, Free State and North West. Simultaneously it drew heavily on the support of black business lobbies doing business with the state, notably at provincial and local government levels. 

By implication, the RET faction was often implicated in the corrupt practices referred to as “state capture”. Yet there was more to it than that. While various “Indian” business people who were tied to Zuma, especially in KwaZulu-Natal, were on the periphery of the RET, the faction itself was largely Africanist politically, protesting a continuation of white power under a veil of democracy.

The faction also drew energy from black professionals fighting against what they depicted as white domination of their professional spheres, and the radical black student lobbies which emerged during the “RhodesMustFall” and “Fees must fall” protest waves of the late Zuma period. 

By the time of the December 2017 ANC elective conference, the RET faction was strongly anti-Cyril Ramaphosa and pro-Nkosazana Dlamini-Zuma in the race for the ANC presidency. The narrowness of Dlamini-Zuma’s defeat has provided it with a strong oppositional presence within the ANC during the Ramaphosa presidency, hampering his efforts at reform. 

Understanding the RET faction

If it is difficult to pin down who belongs to the RET, it is equally difficult to define what they want. Nonetheless, four broad themes emerge.

First, the motive behind the faction seems to be black economic empowerment, but not the empowerment originally envisaged by Thabo Mbeki with its carefully regulated industrial charters and targets. The RET version was a generalised insistence that the state machinery (government departments, provincial and local administrations, and state-owned enterprises) be leveraged to allocate contracts to black businesses. 

This is justified by attacks upon “white monopoly capital”, arguing that the South African economy has changed very little since democracy in 1994, and that white business is covertly determined upon maintaining white power. 

The second thrust, closely related to the first, is a generalised attack on the constitutional settlement of 1994-96. The “Mandela compromise” is criticised as having done little to ease the poverty and unemployment of the black population.

The RET is highly ambivalent about the constitution’s defence of property rights but has little respect for the other laws, rules and regulations which the constitution puts in place. By implication, the judiciary is regarded as suspect, as its function is to see that the constitution is enforced

Third, overlap with the Economic Freedom Fighters (EFF), which depicts itself as Marxist-Leninist-Fanonist, sees the RET faction driving the call for the state to extend its right to the compulsory expropriation of land. The impetus comes from the fact that, despite the government’s programme of land reform, a hugely disproportionate amount of land suitable for agriculture remains in white hands. The faction, like the EFF, appears to admire the Zimbabwean land reforms of the early 2000s, which saw mass expropriation of white farms, but rarely advocates this openly.

Fourth, the RET faction is a strong supporter of state enterprises. Although the faction would not object to the transfer of state enterprises into black hands, privatisation is feared as likely to result in the acquisition of state businesses by white companies. 

In any case, the RET faction is heavily embedded within the state-owned enterprises. Their operatives allocate valuable contracts to black “tenderpreneurs” – business people who feed on government contracts. By implication, it is opposed to all versions of “structural reform” touted by the Ramaphosa government and lobbies attached to “big business”.

What the RET faction wants

Trying to work out precisely what the RET faction wants is difficult because it has no agreed manifesto. However, three problems stand out:

First, it remains unclear what the RET faction would put in place of the existing constitution. 

Should the constitution be reworked, and if so, how? What are the specific flaws in the constitution as it stands? For the moment, all we are left with are generalised attacks on the judiciary for individual judgements the RET dislikes, demands for changes of the expropriation clause in the constitution, and so on.

Second, the RET faction has no general plan for land reform. Crucially, it ignores the increasing domination of agriculture by huge agri-businesses.

These mega-firms are hugely complex operations. It is one thing to expropriate small white farms; quite another to engage in a battle with huge corporations which probably incorporate foreign as well as local ownership. And what would happen to food production if the state were to take them over?

Third, it is common knowledge that South Africa’s parastatals are failing. Eskom, the power utility, can’t deliver enough electricity and is burdened by unpayable debtTransnet, the transport parastatal, is in chaos, unable to maintain the infrastructure needed for business to operate efficiently. The public railway system is a shambles.

South African Airways, the national airline, has collapsed financially and is being propped up by state funding. The Post Office is unable to deliver the post. The reasons for these failures are many, ranging from the ANC’s systematic undervaluation of technical ability to run complex operations, its political deployment strategy, and the mass looting of state bodies that took place under Zuma

Turnaround strategies have failed. The difficult question for the RET (and the ANC at large) is: if not privatisation, then what?

Roger Southall is Professor of Sociology, University of the Witwatersrand

This article is from The Conversation

ZA Confidential Wine-Tasting Podcast. Landskroon Cab Sav 2020.

By John Fraser

Sometimes we rave over a wine when we glug away on our podcasts, but unusually we all raved about the quality and price of this red gem from the Cape.

Michael Olivier presented the superb Landskroon Cabernet Sauvignon 2020 to some experienced, often overworked palates. They are EY Cova partner Duane Newman, IT consultant Malcolm MacDonald, auto industry executive Jeff Osborne, and the branding brilliant Jeremy Sampson.

There was also a discussion about the difference between red and white wines. No intellectual waffle here.

Click below to sniff out what we found:

Meanwhile, it is not too late to seek out Michael Olivier’s latest cookbook, which is a wonderful celebration of South African cuisine. It will fit in your Xmas stocking. If you are enormous.

An excellent choice for any time of the year

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