Two state-owned entities, Eskom and Transnet, are without CEOs and by the look of things it might take time to appoint new ones amid Public Enterprises Minister Pravin Gordhan being accused of allegedly interfering.
However, Gordhan denied interfering in the two institutions.
DPE spokesperson Richard Mantu was contacted to clarify if Gordhan interfered or not; by deadline he had not responded.
Eskom’s ex-CEO Andre de Ruyter left the power utility earlier this year while Portia Derby resigned as CEO of Transnet a few days ago.
The trouble at Eskom has led to ongoing load shedding being implemented, a move that left South Africans frustrated, businesses big and small hard hit and the economy on its knees.
Transnet, on the other hand, plunged to an annual loss of R5.7billion in the last financial year.
The logistics company blamed continued declines in rail freight volumes and higher borrowing costs.
When addressing the challenges at these institutions, Gordhan said it was important to remember that the problems at Eskom started in 1998 going around to 2006/7; he said government has not built a power station, there was Medupi and Kusile power stations.
He said the second thing to remember is that both Eskom and Transnet were the subject of all sorts of corruption, and te wrong boards being appointed.
He said the major part of the first year or two was about just fixing all the basic things at both entities.
“I think there’s a catch up that is actually going on, firstly in relation to the stability on the generation side, but what we still need is megawatts to come online at various stages down the next 18 months or so.
“Secondly, in terms of leadership, we have a new board in place for the last year but they’ve been tied up in various processes in relation to the CEO but let me say categorically that we want this process concluded sooner rather than later,” Gordhan said.
He said they hope they will have the right kind of people in place at a leadership level pretty soon.
“But remember also that Eskom is undergoing restructuring. So we are separating Eskom into transmission, distribution and generation.
“So, that process is moving in parallel with the process of bringing on more megawatts to renewables, but through other sources as well, and fixing and getting the right performance from the current fleet of power stations,” said Gordhan.
Regarding Transnet, Gordhan said first they have a debt burden of about R140 billion.
“Secondly, we have had declining volumes in terms of exports.
“Thirdly, that means that declining volumes mean less revenue for Transnet, less profits for companies, and therefore less corporate tax, and therefore less tax collections.
“So you have a vicious circle at a time when the demand for certain types of commodities was very high,” he said.
Gordhan said he instructed the board to agree with a greater sense of urgency to get to the bottom of these performance problems and take whatever action they think is necessary.
Asked if Derby was pushed or had jumped, Gordhan said he has been told that she resigned to pursue other interests.
He said the board is in the best position to comment about her resignation.
Independent analyst Khaya Sithole said he thinks the problems at Transnet have been building up for quite an extended period of time.
“What we do know is that in recent times there has been an acceleration of some of their challenges they have.
“And I think what we then also saw is that there was this extraordinary push by the various constituencies, ranging from the minerals councils and other business chambers, which simply say, that look, left to its own devices, Transnet was simply not going to be turned around.
“And of course, they said they had tried to sort of reason and engage with the executives on a more intimate basis, but when that failed, they issued public calls for the removal of those particular executives.
“I also think it didn’t help that the financial fundamentals of Transnet in particular have really been deteriorating to such an extent that it was very difficult to figure out what was it that Transnet was tackling as an immediate fix,” said Sithole.