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New Public Enterprises Minister Gordhan set to bring measure of stability to Eskom

Feb 28 2018 07:36
Yolandi Groenewald and Ntaoleng Lechela

Johannesburg - Power utility Eskom will benefit from stronger political leadership under Pravin Gordhan as new minister of public enterprises, analysts have said.

Gordhan will head up the critical public enterprises department, overseeing around 300 state-owned enterprises, including cash-strapped Eskom that is in need of a new political and operational direction.

He is replacing Lynne Brown, who will leave the portfolio with a shadow looming over her due to her alleged links to the Gupta-family as well as overseeing the state utility while it headed towards bankruptcy.

The Public Protector also found Brown guilty last week of lying to Parliament, over her reply that Eskom paid no money to consultancy Trillian, when the contrary was true.  

She said she had been misled by Eskom who provided the faulty information.

Ernst & Young African Mining and Metals leader Wickus Botha said the appointment of Gordhan did not come as a surprise.

“Gordhan is seen as Mr Fix-It and our state-owned enterprises have some of the biggest problems,” he said.

He believed that Gordhan would be a breath of fresh air at Eskom.

Opposition leader Mmusi Maimane was critical of the Cabinet, but he said the appointment of Gordhan as minister of public enterprises was sound.

“We do hope he will lead the charge in rooting out the rot within our state-owned entities,” he said.

Law firm Hogan Lovells also believes the appointment of both Jeff Radebe as Minister of Energy along with Gordhan suggested that there will be progress in relation to Eskom.

The firm is hopeful that Gordhan will accelerate the various power and renewable projects in South Africa, which have been stagnating.

CEO of Business Leadership South Africa (BLSA) Bonang Mohale believes Gordhan would “strengthen government’s hand” in dealing with state capture and corruption, and facilitate the efforts to address the governance and leadership at state-owned companies.

Gordhan and Brown had a showdown in Parliament in November when she gave evidence before Parliament's ad hoc committee probing state capture at public enterprises.

Gordhan, a member of the committee, had been critical of Brown and grilled her on her role in the alleged state capture. He declared that her answers to accusations of state capture were "lies, lies, lies".

During her evidence, the then minister denied reports that she had consulted with members of the Gupta family before making decisions.

She also denied that she covered up governance and financial irregularities at Eskom.

"We are not at that point yet that we can prove that people have done things wrong," Brown told MPs.

Shortly after his appointment on Monday night, Gordhan told Karima Brown on Radio 702 that he would need time to study all the problematic issues at state enterprises.

He said the state-owned enterprises are a crucial part of South Africa’s economy and the country’s fiscal system, and the extent to which they do well is the extent to which they contribute to the development and economic well-being of South Africa.

“We have seen what all the fault lines are in the public domain already, including rampant corruption,” he said, adding that he would first get a better grip on some of the issues that he will have to deal with.

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