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Eskom's board will be asked to give an explanation to the Standing Committee on Public Accounts about why it did not attend a scheduled committee meeting with MPs on Tuesday.
Top management at the debt-laden utility, including its CEO Andre de Ruyter, as well as Deputy Minister of Public Enterprises Phumulo Masualle were in attendance. The meeting was an opportunity for Eskom officials to brief Scopa about what progress it has made in relation to recommendations set out by the committee following site visits to the Medupi and Kusile power stations in August 2019.
The meeting got off to a rocky start after De Ruyter conveyed the apologies of the group's interim chairperson, Professor Malegapuru Makgoba, for not attending. Asked for a reason, De Ruyter said he was not given one. "The chairperson informed me yesterday that he elected not to attend. That is where the matter ended," De Ruyter said.
Scopa chairperson Mkhuleko Hlengwa, of the IFP, said it was "unacceptable" that the chairperson was not present, as the board is the accounting authority for the power utility. He further described it as a "dereliction of duty". All interested parties were notified last week about the meeting, giving them sufficient notice, he said.
"The absence of the board is indicative of the problem generally at Eskom," Hlengwa said. He suggested that the entire board should have resigned over failing to keep their promise that there would be no load shedding over Christmas, and not just the former chairperson Jabu Mabuza.
"It is inexcusable that certain individuals chose to remain, as if we are dealing with decisions being taken in silos and a board which is not working as a team," he added.
ANC MP Bernice Swarts suggested the board send a written letter providing an explanation. This suggestion was backed by other committee members and Deputy Minister Masualle, who said that an investigation into why the board is not in attendance is warranted. He was under the impression that there would be board representation at the meeting.
"It is something we will revert back to the chair about, upon investigation."
On Tuesday it took more than half an hour for the meeting to get to its order of business, but even this didn't go without a hiccup.
MPs expressed frustration that the presentation from Eskom lacked details on matters relating to the power utility's procurement process and forensic investigations. At one point Hlengwa suggested that the meeting might not be able to continue. Given that the Eskom officials had travelled from Johannesburg, he allowed them to proceed, but implored them to provide more details relating to the recommendations made by the committee.
Sticking to targets
Despite the construction of Medupi having been started in 2007, it is still not fully functional. Kusile's construction started in 2008 and its completion date has been pushed out to 2023.
The construction of the two coal-fired power plants has been impacted by cost overruns, poor designs and allegations of corruption, Scopa noted. The construction of the power stations have run over budget, escalating from R79bn to as much as R145bn for Medupi, and from R81bn to R161.4bn for Kusile.
Hlengwa stressed that there was no more room to shift out timelines or the budget for the power stations. "We are not going to accept any other further changes or goal shifting of targets," he said. To this, group executive of generation Bheki Nxumalo assured that the costs of Medupi and Kusile to date have not again changed.
The debt-strapped utility has warned of an increased likelihood of power cuts over the next 18 months as it conducts maintenance on its fleet of ageing power plants.
In his closing remarks to the committee, De Ruyter said that there is a "long way" to go in addressing the many issues at Eskom – including those at existing power stations, the new build programme (Medupi and Kusile), internal governance and the culture of adhering to good commercial practice.
"We are committed to meeting our obligations to South Africa to become again, a reliable supplier of sustainable electricity to the country. We take this obligation seriously, but it will require time.
"For that time, we request not only the committee's indulgence but also the patience of the nation while we bring about the turnaround," he added.
While the power utility has prioritised working on the generation side of the business, De Ruyter said there is also "significant work" to be done on the transmission and distribution side of the business. He requested that Eskom officials return to present to the committee its generation turnaround plan.
Eskom will by next Wednesday have to submit to the committee written, detailed replies to questions relating to Medupi and Kusile and the prospect of load shedding for the next 18 months. The power utility will also have to provide an update on the vetting of its employees.
Scopa will meet again with Eskom on March 4, 2020 to interrogate its finances.
