Plans afoot to fill engineer gap as Pravin Gordhan confirms Eskom board will be reconstituted

Workers inside the control room at the Eskom Holdings SOC Ltd. Lethabo coal-fired power station in Vereeniging, South Africa, on 5 November 2021. (Photo: Waldo Swiegers / Bloomberg via Getty Images)

By Ferial Haffajee

26 Sep 2022

The Eskom board will be restructured, Pravin Gordhan has confirmed. This follows reports that President Cyril Ramaphosa was said to be planning changes to the management and board of Eskom, and experts say it is essential that skilled engineers be appointed to the board.

South Africa is buckling through its worst year of energy availability, but the Eskom board does not have a single electrical engineer on it. As the Presidency and Public Enterprises Minister Pravin Gordhan prime the country for changes, the board could be in for a big sweep.

On Tuesday, News24 reported that Gordhan had written to the six non-executive Eskom directors, alerting them to board changes.

In a statement later on Tuesday, Gordhan confirmed that the board would be reconstructed and reconstituted. "The Minister informed the board that a review has been finalised and that the Board will soon be reconstituted and restructured. The Board members will be informed of the outcome of the process.," said the statement.

Our graphic shows that none of the eight current directors has operational electricity experience and that none is an electrical engineer. Does it matter?

“It’s absolutely necessary,” says Parmi Natesan, the CEO of the Institute of Directors. “Industry knowledge and technical proficiency [are] important,” she says, pointing out that one of the reasons for African Bank’s failure in 2014 was that its board composition did not have the requisite skills.

Natesan says that while a company’s operations are the purview of its management, it is still essential to have the requisite skills. “[The directors] may not necessarily have run a company,” says Natesan, “but they need to know the sector.”

Workers inside the control room at the Eskom Holdings Lethabo coal-fired power station in Vereeniging, South Africa, on 5 November 2021. (Photo: Waldo Swiegers / Bloomberg via Getty Images)

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The Eskom board is chaired by the molecular immunologist and former UKZN vice-chancellor Malegapuru William Makgoba. Rod Crompton has long policymaking experience in energy but has not been at the coalface of electricity delivery. He was a regulator with the National Energy Regulator of SA (Nersa). The closest the board gets to requisite skills is Pulane Elsie Molokwane, a former senior nuclear physicist at the pebble bed modular reactor project.

The CEO, André de Ruyter, has a good executive pedigree and earned his stripes at Nampak. He spent 20 years in coal, gas and coal plant operations at Sasol, in South Africa, China, Germany and the Netherlands.

The CFO, Calib Cassim, is a long-timer at Eskom, but he is a money man, not an engineer.

Eskom is an engineering company that runs power plants, and it does not have a director who understands its core business, says an industry expert. Those plants are in crisis, and the board needs directors who can speak “plant language” to support Eskom’s executive suite, which is being rebuilt after being compromised by State Capture.

Until its capture, Eskom always had one or two electricity utility specialists on its board. But that practice ended under former president Jacob Zuma, whose patrons, the Gupta family, trained their sights on coal supply to Eskom.

Natesan says a blend of skills is essential and that a public-facing company like Eskom needs to keep the public interest in mind — or “what’s good for the country”, she says.

“You can’t overload the board with engineers,” says Professor Lwazi Ngubevana, the director of the African Energy Leadership Centre at the Wits Business School, “but would you have a water board without a water engineer?”

He says a complex utility like Eskom needs a blend of governance, finance and other specialities. Having international expertise on Eskom’s board wouldn’t do any harm. Still, he says, directors brought in from abroad need to have a “developmental state” frame of mind, given the many mandates Eskom has. It is still SA’s majority energy provider, it must electrify areas without power and be a transformation leader.

At the time of writing, half the installed capacity of the grid was still on planned or unplanned outages while the utility was struggling to buy diesel, given the escalating energy crisis in Europe. DM

This article was amended to clarify André de Ruyter’s experience with energy. The article was then updated at 2.20 pm with confirmation from Gordhan of imminent board changes.

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