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New boards of Eskom divisions to hold first meetings next week

Mar 06 2020 11:46
Sibongile Khumalo

The boards of three newly restructured divisions at state power utility Eskom have been appointed and are set to hold their first board meetings next week as the utility implements changes to its operating structure, its CEO Andre de Ruyter has announced. 

Government last year announced a plan to split the power producer into three separate entities – generation, transmission and distribution, in a bid to improve efficiency. The entities would all still fall under an Eskom holding company.  

The plan to split the entity into three separate operational divisions has been opposed by some unions, who say it will lead to job losses and privatisation.  

Speaking on Thursday evening at the closing of the Black Business Council's summit, De Ruyter said the boards of the divisions had been appointed. "Their first meetings will take place early next week," he said. 

The CEO also spoke of the need to optimise the debt-laden power utility's balance sheet, just as it was conducting infrastructure maintenance to ensure a reliable future electricity supply.

Part of the current phase of load shedding has been attributed to recurrent breakdowns at Eskom's ageing power stations. The company has been blamed for previously neglecting scheduled maintenance of its fleet in a bid to keep the lights on. 

On Friday morning, unplanned breakdowns were at 10 728 MW, about 23% of its total nominal capacity.

Eskom, which supplies more than 95% of the electricity used in SA, has also been experiencing generation unit failures and structural design problems at its two new mega coal-fired power stations, Medupi and Kusile. These have contributed to massive cost overruns and delays in completion.

Medupi was due to be fully operational in 2013, and Kusile was due to follow a year later in 2014, at a total cost of around R165bn. Instead, all Medupi units might only come online in 2021, while Kusile's final completion date has been pushed to 2023, as Fin24 reported.

Load shedding is now expected to be in place until mid 2021. De Ruyter stressed that maintenance, which often leads to power outages, was critical in order to ensure a continued supply of electricity.

"I am personally involved in every decision to implement load shedding, and it is not a decision we take lightly," he said.

The executive, who took over the CEO role in January, spoke of a need to restore Eskom's culture, which he said had been weakened by corruption. He said Eskom was working closely with the NPA to bring those who had used the entity to enrich themselves to book.

A legal process to liquidate Trillian Management Consulting and Trillian Capital Partners over a R600 million payment it received from the company is underway.

The dispute arises from a contract between consultancy firm McKinsey and Eskom, where McKinsey was supposed to develop a turnaround plan for the embattled state-owned power utility.

Trillian was appointed as a subcontractor to McKinsey, allegedly without a valid contract in place, and paid nearly R600m for its work. But Eskom says Trillian never completed any billable work.

trillian  |  eskom  |  black business council
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