Zimpapers Logo

CAPE TOWN. – The South African government on Saturday announced a series of measures to strengthen governance at state-run electricity utility Eskom hit by poor management and corruption.

These measures included the appointment of a new board, with Jabu Mabuza as chairperson and stabilising management at the energy parastatal, the government said in a statement distributed by the Presidency.

The intervention will be ratified by the cabinet at its next meeting, the statement said. The latest development is seen as the most decisive move by the government in recent years to address challenges at key state-owned enterprises (SOEs).

The intervention was spearheaded by President Jacob Zuma, with the participation of Deputy President Cyril Ramaphosa, Public Enterprises Minister Lynne Brown and Minister of Finance Malusi Gigaba. They met at a meeting on Friday to address the “urgent challenges” confronting Eskom.

Eskom’s new board is directed to appoint a permanent Group Chief Executive and Group Chief Financial Officer within the next three months. The government also directed the board to immediately remove all Eskom executives who are facing allegations of serious corruption and other acts of impropriety, according to the statement.

The government further calls on all Eskom employees and other stakeholders who may have evidence of wrongdoing to bring this to the attention of law enforcement agencies so that culprits can be brought to book, the statement said. Other structural issues, which include the funding model and other industry challenges, must also be dealt with, said the statement.

“We are confident this intervention will restore the important contribution Eskom makes to our economy. We are determined to address the damage that has been done to this institution and place it on a new path of efficiency and integrity,” Ramaphosa said.

This will help restore public and investor confidence in SOEs and ensure that they fulfil their economic and developmental mandates, he said. Eskom, which provides more than 95 percent of electricity consumed in South Africa, is critical to the South African economy.

Poor management at the parastatal led to widespread power cuts across the country from 2014 to 2015, dealing a heavy blow to the economy. The company is now facing severe challenges, including a weak financial position, declining revenues and governance failures, which are threatening the sustainability of the company going forward. – Xinhua