Community Municipal News

Is Eskom showing progress?

News Desk

Eskom’s financial, operational and environmental performance will continue to be challenging for some time before significant improvements are realised. However, there has been encouraging progress to instill governance and to root out financial mismanagement, malfeasance, and maladministration.

After its appointment last year, the Board’s focus was on three key issues – Addressing governance failures and rooting out corruption, the weak financial position, and the declining revenue, all of which were threatening the sustainability of the Company.

“On restoring governance, Eskom is cooperating with regulatory bodies and law enforcement agencies conducting major investigations into matters of fraud and corruption affecting the organisation. Investigations are by nature lengthy, given legislative processes,” outgoing Eskom Group Chief Executive Phakamani Hadebe said.

“Nevertheless, we still achieved significant progress in addressing several governance issues. Around 95% of the open disciplinary cases relating to procurement breaches have since been finalised, with about 10% of cases resulting in employee exits. Lifestyle audits of 365 senior employees have been conducted to ensure that those employees comply with the highest standards of integrity and ethics. The high-risk cases have been handed over to the Special Investigating Unit (SIU) for further investigation.”

Furthermore, with the restoration of a culture of ethics and whistle-blowing, there has been an increase in total whistle-blowing incidents reported resulting in investigations and employee exits.

“It is to be expected that new instances of irregularities will be detected as we continue our governance clean-up exercise. We have also made progress in clearing the reportable irregularities previously reported by the external auditors. However, some irregularities will remain open until finalisation of court cases or conclusion of investigations by external parties,” Chairman Jabu Mabuza said.

As a result of the extensive challenges confronting the organisation, Eskom has embarked on a comprehensive strategic review to develop a turnaround plan that would put the organisation on a path towards achieving structural, financial and operational sustainability.

The Public Enterprises Minister Pravin Gordhan announced the appointment of Jabu Mabuza as Interim Executive Chairman and Acting Group Chief Executive of the company with effect from 1 August 2019. He will be taking over from Hadebe for the next three months.  “We remain committed to contributing to the development of the South African economy, and we recognise our responsibility to society and industry to provide an enabling environment that fosters welfare, economic growth and equality,” Mabuza concluded.

Eskom continues to show progress in restoring governance and improving efficiencies as part of its turnaround plan; despite major operational and financial challenges facing the company.

What have they done so far?

  • Recovered R1 billion from McKinsey, R600milion expected from Trillian, pursuing recovery from 10 suppliers where total spend amounts to approx. R72 billion.
  • Reduced operating expenditure by R9.9 billion against a savings target of R10.6 billion. However, cost savings absorbed to minimize load shedding.

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