As it happened - #StateCapture: Eskom has a culture of fear - former Eskom executive

Eskom has a culture of fear - former Eskom executive

Eskom's former Group Executive Enterprise Development Erica Johnson admitted that a culture of fear took shape during her last months at Eskom.

She admitted to ANC MP Pravin Gordhan that the culture had only intensified after she had left.

Johnson said a number of incidents struck fear into Eskom employees. When the head of energy was suspended, she became concerned.

"He was a hardworking person, and after a dispute of a certain conversation, he was suspended," she said.

One more incident that concerned Johnson happened in her last month of Eskom, when she became aware that general managers were not willing to engage openly, and was keeping quiet on critical matters.

"I would be sitting at tender board committee and not one member would say anything. The silence in the company was a concern."

She acknowledged that the climate of fear was persisting at Eskom, before she was dismissed.

The hearings adjourned for the day. 

Ex Eskom boss Matjila pushed hard for The New Age breakfast briefing - former Eskom executive

Eskom's former Group Executive Enterprise Development Erica Johnson said former interim CEO Collin Matjila had ordered her team to develop The New Age business breakfasts, which amounted to R1,2m per breakfast.

The power utility's R43m contract to sponsor The New Age's (TNA's) breakfast briefings caused a stir in 2014. The paper was owned by the Gupta-family at the time.

Democratic Alliance MP Natasha Mazzone asked Johnson why Eskom had opted for The New Age, and not a top quality news agency.

Johnson said the request came directly from Matjila. "It wasn’t something we requested,  it was a direct request from Majila and he didn’t give a specific reason. We just had to ensure it was justified and effective."

Johnson said she had tried to work with Majila.

"R1,2m is a lot of money," she said.

"It ate up a huge portion of our corporate budget. We were being engaged with Mathila, and we tried to work with him to understand. If we could get people to understand all the challenges Eskom faced, it might be money worth spent. It would've been helpful to have a better stakeholder understanding."

She admitted that she was disturbed by Matjila's request. "We were working with Majila to meet his needs, to see where he wanted to go."

But then Eskom finance director refused to sign the New Age contract, and Matjila took upon himself to sign the contract, Johnson said. 

We as a team decided this was not the way we wanted to operate." 

When asked whether she thought Matjila was captured, Johnson replied the term was not yet part of the colloquial at that time. "I know he certainly wanted that contract."

Ex Eskom boss Matjila pushed hard for The New Age breakfast briefing - former Eskom executive

Eskom's former Group Executive Enterprise Development Erica Johnson said former interim CEO Collin Matjila had ordered her team to develop The New Age business breakfasts, which amounted to R1,2m per breakfast.

The power utility's R43m contract to sponsor The New Age's (TNA's) breakfast briefings caused a stir in 2014. The paper was owned by the Gupta-family at the time.

Democratic Alliance MP Natasha Mazzone asked Johnson why Eskom had opted for The New Age, and not a top quality news agency.

Johnson said the request came directly from Matjila. "It wasn’t something we requested,  it was a direct request from Majila and he didn’t give a specific reason. We just had to ensure it was justified and effective."

Johnson said she had tried to work with Majila.

"R1,2m is a lot of money," she said.

"It ate up a huge portion of our corporate budget. We were being engaged with Mathila, and we tried to work with him to understand. If we could get people to understand all the challenges Eskom faced, it might be money worth spent. It would've been helpful to have a better stakeholder understanding."

She admitted that she was disturbed by Matjila's request. "We were working with Majila to meet his needs, to see where he wanted to go."

But then Eskom finance director refused to sign the New Age contract, and Matjila took upon himself to sign the contract, Johnson said. 

We as a team decided this was not the way we wanted to operate." 

When asked whether she thought Matjila was captured, Johnson replied the term was not yet part of the colloquial at that time. "I know he certainly wanted that contract."

I couldn't raise alarms - Matona

Former Eskom CEO Tshediso Matona concludes his testimony by defending himself and his lack of action while critical coal contracts, which were later linked to the Gupta-family, were negotiated.

When asked why he didn't raise the alarms earlier, he said as a CEO he was not involved in the procurement issues, until it was handed to him for further approval. He was suspended before it came before him.

He also said there were several negotiations of contracts going on at the time.

"Why would I target a specific negotiation," he asked.

"I was operating within a specific institutional framework. It excluded the CEO from directly arbitrating procurement. DG’s don’t arbitrate directly," he said.

Matona was dismissed without further questions and Eskom's former Group Executive Enterprise Development Erica Johnson was called.

Zuma did not say sorry – former Eskom CEO

Former Eskom CEO Tshediso Matona said President Jacob Zuma did not apologise for the way the Eskom treated him.

He was suspended amid the Dentons investigation and then cleared of all wrongdoing. But the damage was done and Brian Molefe stepped into the leadership at Eskom.

EFF MP Floyd Shivambu asked Matona if Zuma apologised, as reported in the Mail & Guardian in 2015.

“That is what the newspaper wrote,” he told the Eskom inquiry. “That is not quite factual. He did not call me to say sorry about what happened. It is difficult to disclose the contents of a meeting of that nature. I was at home and it was about what career options there are for me.

“Having served in this government from the begging, it was difficult to fight against my own government. Even as hard it was fighting the institution I tried to build. This government has invested a lot in me.”

Matona was then appointed as the National Planning Commission’s secretariat.

Then, Shivambu asked Matona if his successor, Brian Molefe, ended load shedding?

“If I ever thought I could not end load shedding on my own, I would have left Eskom on my own," responded Matona. "It was a challenging job, but the solutions were there and we could see the light.

“We were making steady gains. By the time I left, we had commissioned the first unit at Medupi because we applied pressure on contractors, saying we would not entertain any more delays.

“I am confident the situation in a matter of time, but unfortunately I was not given the opportunity.”

Then, Shivambu interjected: “Therefore the narrative that Brian Molefe was the only one to stop load shedding is not correct. You are saying we could have done it without Brian Molefe?”

Matona repeated: “I was confident that I could achieve. He could not have done that alone. He found a team fighting this war and the plans.

“He achieved the objective, so I don’t think Brian would himself claim these exceptional capabilities. He acknowledged the work that had been done before he was there. This is not a competition between Brian and I.”

Asked about his payout, he said: “It was handshake, but there was not gold in it.

“It was an equivalent of my year’s salary. I tried to negotiate for better. Sometimes, when I saw the numbers, maybe I thought I should have fought harder.”

Two questions of note:

1. Were you ever pressurized by the board?

"Yes, I indicated that there was an instance where a suggestion had been made for me to retain CEO Collin Matjila and I refused that suggestion."

2. Did you ever meet the Guptas?

"I have had no interactions with the Gupta family."

Former Eskom chairperson Zola Tsotsi looks on as former Eskom CEO Tshediso Matona speaks during a press conference in January 2015 when they were still in their respective roles. (Photo: Gallo)

Eskom suspended me because I did not fit into their plans - Ex-CEO

Former Eskom CEO Tshediso Matona said he believes he was suspended because he did not fit into the board’s plans for the future of Eskom.  

Former Finance Minister Pravin Gordhan asked Matona to explain the board meeting where he was told he was suspended.

“That whole interaction was being managed in a manner that would create a defence for the board that it gave me an opportunity to make representations. It was a farce in my view.

“I could see at the time that the outcome was pre-determined. There was a letter of suspension in front of the chairperson. It was a matter of course that I was suspended.

“I was a bit dazed and confused. All kinds of things were playing in my head. Some of the information started to surface. The chair, Mr Zola Tsotsi, made certain pronouncements.

"I read I had been suspended for refusing to do certain things," he said. “I had refused to keep the former acting CEO Collin Matjila on at Eskom, which I did not want to do as there were allegations regarding his tenure.

“The board did not see me fitting into whatever its plans were. Typically when a new minister joins a department, I would ask if they saw me as part of the future. I recall an episode like that. I concluded that Eskom board did not see me as part of their plans in the future.”

Regarding the Dentons Report, which was the result of the investigation that occurred when he was placed on suspicion, he said: “I was never afforded an opportunity to speak to the investigators.

“When they first released one of the versions of that report, it was found that there was no wrongdoing against me or other executives. “I was not favoured a copy of the report. I have still not seen the Dentons Report.”

Diesel contracts during load shedding 'illustrated basic flaws of procurement at Eskom'

Former Finance Minister Pravin Gordhan asked Former Eskom CEO Tshediso Matona about diesel contracts during load shedding, when they needed to power peaking plants to keep the lights on.

Eskom spent R1bn a month on these costs.

“It was a contested issue at the time,” said Matona. “It illustrated the basic flaws of procurement at Eskom.

“It seemed that emergency situations had been used as a reason to deviate from what normal procurement would be.

“I have some understanding because you need quick turnaround to keep the lights on, it created a major risk about who got the contracts and why those particular individuals.

“A normal procurement would have prevented this.”

Let me talk about bugs at Eskom - former CEO

Former Finance Minister Pravin Gordhan asked Former Eskom CEO Tshediso Matona about an Eskom board meeting on 11 March 2015 where the bugging of the board room had come up.

“Let me talk about bugs at Eskom,” he responded.

“Developments within the company – especially deliberations of the board – were leaking to the media. So, there was a decision that periodically the board room would be swept of devices.

“In the time that I was there, I instituted two such sweeping of the board room.

“On that day, I don’t know where the minister was coming from, because she raised the issue of a bug in an accusatory way,” he said.

“I told her that I periodically sweep these rooms. That interaction did not go as far as who was bugging who.”

Former Eskom CEO Tshediso Matona. (Photo: Gallo)

I decided to leave that sorry and sordid episode – Ex-Eskom CEO

Former Eskom CEO Tshediso Matona explained that after he was suspended in 2015, he eventually decided to walk away from the sordid episode at Eskom.

He was suspended by former Eskom chair Zola Tsotsi into the maladministration of Eskom just seven months after he started. He had been the former director general of Public Enterprises before that.

“I expressed a disagreement with the initiation of a new report and an investigation that required my removal from the company without any basis whatsoever for why I should be removed.

“I was handed a letter of suspension and believed that action was wrong. I believed it was wrong and went to the Labour Court and sort my reinstatement. It was sent to the CCMA.

“When things got there, I found that the Eskom board had excluded any possibility of my return as an outcome of that arbitration. In fact, I was made an offer to leave the company.

“I could have fought further and challenged the issue. I realised I would have bankrupted myself as I would have had to pay out of my pocket.

“I chose to walk away and leave that sorry and sordid episode behind me and move on with my life. The relationship of trust between myself and the board had been dealt a mortal blow.

“I was just pleased that out of principle I had challenged that because I believed it was wrong. It was very wrong,” he said.

Matona takes credit for Eskom's plant maintenance revival

Former Eskom CEO Tshediso Matona has taken credit for getting Eskom’s plant maintenance programme up and running. He was chief executive for seven months in 2014 to 2015.

His successor, Brian Molefe, has been celebrated for his plant maintenance programme, but Matona indicated that he had done the hard work to get this programme going.

“Eskom relied on a great deal on diesel to use the peaking plants,” he said. “That created massive pressure on the finances of the company. It was a stop gap to create the room for Eskom to conduct maintenance,” he told Parliament.

“The big problem that accounted for generation and supply was the breakdown of the units at Eskom. They were simply tired. Maintenance had been deferred for too long.

“The story which I heard when I got there was that in 2010, for purposes for the World Cup, a decision had been taken to defer maintenance for these plants. Due to local elections, a decision had been taken to defer maintenance.

“There had been a culture of deferring maintenance, simply because the executives at Eskom feared load shedding and resisted having to load shed for as long as possible.

“When I got there, we could no longer defer maintenance. The main thing was to reinstate a discipline of maintenance. Eskom fell in line. The rewards of those plans started to show soon after I left.

“The actual programme of doing maintenance started in the few months that I was there,” he said.

Just as Eskom was coming right, load shedding hit - Matona

The financial performance of the company was the major challenge facing the Department of Public Enterprises in 2014, said Tshediso Matona, the former Public Enterprises director general and Eskom chief consecutive.

He first explained the situation when he was director general.

“Eskom revenues were coming under pressure, partly due to early signs of economic slowdown. It was starting to become apparent in the cause of that year.

“There was the issue around the tariff regarding whether it was sufficient to balance the financials,” he said.

“There were challenges around debt and collection. The long and short was that Eskom was in serious financial straits. That shareholder became directly involved around that issue.

“As director general, I interacted with National Treasury quite a lot at the time. We were jointly looking at this problem. We also interacted with Nersa as the regulator, who provided very valuable information and advice.

“There was a decision to provide Eskom with a financial injection to the tune of R23bn,” he said.

“That package included the conversion of a loan to equity. That seemed to deal with the financial challenges.

“In parallel, new challenges emerged to supply electricity without interruptions. Incidences of load shedding started to occur in 2014."

Two months after he was appointed Eskom CEO, the Majuba Power Station coal silo collapsed, intensifying load shedding.

"It accelerated towards the end of the year, when I arrived as CEO. As soon as I arrived there, load shedding intensified," he said. 

“Operational performance is the responsibility of the company,” he said. “We embarked on a number of strategies to solve that problem.”  

Matona explains the role of the minister in Eskom oversight

Inquiry evidence leader advocate Nthuthuzelo Vanara asked former Eskom CEO Tshediso Matona to explain the process of appointing a chief executive at Eskom.

Matona said that the Eskom board would put together a list of three names for the Minister of Public Enterprises to select from for chief executive officer and chief financial officer. This normally gets Cabinet approval before being made final. The vacancy would normally be advertised for three months before a selection is made, he said.

“Up the point to where the board has completed the process and come to a decision (in a private sector company, the process would be complete as the board has that authority), the shareholder needs to concur and that is the exercise of the SOE rights. It is a fairly common practise,” he said.

“The minister’s right is the appointment of a board,” he said. “If the board is not doing well, the minister must decide how to intervene. A proper governance structure centred on the board is the primary responsibility of the minister.”

 “As a department, that is where we normally support the minister.”

Eskom would give the department quarterly reports on its progress on the plans it laid out. All this culminates in the Annual General Meeting where the annual financial results are presented, he said.

“It is in this context that new strategic decisions are taken with regard to the company,” he said.

Former Eskom CEO Tshediso Matona. (Photo: Gallo)

Who is former Eskom CEO Tshediso Matona?

Matona was Eskom CEO for seven months from 2014 to 2015, when he was suspended by chairperson Zola Tsotsi, pending an investigation.

After he was cleared, he resigned. President Jacob Zuma apparently apologised to him for the bad treatment he received. Later in 2015, he was appointed as secretary for national planning in the Department of Planning, Monitoring and Evaluation.

He was CEO when the silo collapsed at Majuba Power Station, which saw the start of load shedding.

Before being CEO, he had a 20 career in the public service sector.

According to Eskom's website, Tshediso Matona is a long-serving professional public sector executive, on the level of Director-General (DG), akin to CEO, with close to 20 years of management and technical experience in Government.

As DG of the Department of Trade and Industry (2006-2010) and then DG of the Department of Public Enterprises (DPE, 2011 to 2014), he has deep policy and strategy knowledge and expertise in the economic, industry and business sectors: and strong, proven strategic and leadership capabilities. 

He has been at the centre of Government policy-planning, and has led execution of its major strategic programmes, in the fields of International Trade, Industrial Development and Investment Facilitation, Enterprise Development, Economic Regulation, Broad-based Black Economic Empowerment, Infrastructure Development. 

He has played a key leadership role as the Coordinator of Departments and DGs in the Economic and Infrastructure Clusters in Government, where he interacted at Cabinet-level and with the President, Deputy President and Ministers.

Also, in his role as DG, he has regularly interfaced with Industry, Business, and Organized Labour leaders and stakeholders, as part of relationship-building and consensus-building around key Government policies and programmes. 

As DG of DPE, he is the Head an organization of over 200 staff and professionals (with a budget often in excess of R1,5bn, depending on transfers), and is responsible for supervising strategic, technical, financial and legal expertise required for the Minister’s oversight of 8 major State Owned Companies (SOC) that include Eskom, Transnet, Denel, Safcol and Infraco. At DTI, he headed a 1200-staff organization with a budget of around R9bn.

Previously at #StateCapture Inquiry: Members of Parliament grilled the Eskom Pension and Provident Fund about why they allowed Eskom’s request that saw ex-CEO Brian Molefe given a R30m pension payout.

Previously at #StateCapture inquiry: Between 2010 and 2014, the Eskom board was “gutted” and members with little experience in the power sector were put in place, said Professor Anton Eberhard, author of the Eskom Inquiry booklet, prepared for parliament’s inquiry.

Previously at #StateCapture inquiry:  Former Trillian Management Consulting CEO Bianca Goodson told Parliament that she joined Trillian to build it into a new black-owned and run management consultant firm, but that she was deceived by the Gupta-linked firm.“I was lied to blatantly by Trillian, which I thought would be a proudly black consulting firm,” she said.

Previously at #StateCapture inquiry: Former Eskom CEO Brian Dames and Outa’s head of energy Ted Blom testified before Parliament’s state capture inquiry focusing on Eskom on Wednesday.

Former Eskom CEO Tshediso Matona testifies in Parliament

Former Eskom CEO Tshediso Matona is set to testify in Parliament's state capture inquiry being conducted by the public enterprises committee.

The hearing, which has been criticised by former Eskom CEO Brian Molefe for being unfair, has seen five individuals provide testimony.

First, Professor Anton Eberhard gave an overview of state capture at Eskom. Then former Eskom CEO Brian Dames provided an overview of his time at the power utility from 2008 to 2014.

Eskom's pension fund chief followed to explain Molefe's R30bn pension payout.

He was followed by two Trillian whistle blowers, who testified about their role in working with Eskom.

See the above links for full coverage.