Current CEO Tshediso Matona was suspended about a month ago for three months to make way for an investigation into the real state of affairs in Eskom.
Brown said she wanted to see Brian Molefe at Eskom for at least a year. If Matona’s suspension is lifted at the end of the three-month period, “We will give him (Molefe) another title”, she said. “We will work something out” for them to work together, she said.
The Transnet board will by Monday make a recommendation to the minister about one out of three internal candidates to fill Molefe’s shoes in his absence, Brown said.
Current acting Eskom CEO Sinethemba Khoza will return to his board seat.
Brown said she needed a “full time” executive at Eskom as it is a strategic asset and it is critical that it operates optimally and contributes to the economic growth of the country.
She said the announcement of the investigation into Eskom has created uncertainty and to stabilise the leadership she decided to second Molefe. This was done after consultation with President Jacob Zuma, Deputy President Cyril Ramaphosa and the boards of Eskom and Transnet.
She said Molefe’s experience in turning around the Public Investment Corporation, where he served as CEO and subsequently providing stability at Transnet showed his ability to lead complex institutions. His experience in financial markets will also be very valuable, she said.
Brown said there is enough technical expertise in Eskom, but what is needed is leadership to optimise that expertise.
Molefe said his first priority would be to minimise load shedding. This comes as the country suffered daily load shedding up to Stage 3, with some areas being hit twice per day, since Sunday. In the medium term he said the focuses would be on the efficiency of coal generation and the introduction of alternative sources of energy.
He would not be drawn on his availability should the CEO position become available.
Brown said she will submit proposals to Cabinet for further appointments to strengthen the Eskom board.
Brown does not want to deal with governance issues at Eskom anymore. “If an executive or a board member must go, he must go. We have bigger problems to deal with,” she said.
Eskom chairman Zola Tsotsi recently resigned after the rest of the board voted him out. Brown said she did not want to dwell on that, but did say Tsotsi drew up the initial terms of reference for the investigation on his own.
Brown announced the appointment of global law firm Dentons to do the “Deep Dive” investigation into Eskom in the next three months. Brown had two requirements: that the appointee had not done any work for Eskom before and that it has a global footprint, so that it could draw from that expertise.
Dentons fits the bill on both counts.
The terms of reference have been drafted by the Eskom board’s Audit and Risk and Governance committees.
She said the investigation will focus on five areas:
Eskom’s financial liquidity;
Its maintenance plan, the adherence to it and why it was not adhered to before;
Coal, including the so-called ‘coal cliff’;
The high price Eskom pays for diesel; and
The cost overruns on Eskom’s new build programme and the way forward for these projects, including the labour situation.
Brown said she will make the results of the investigation public to the extent that it does not place Eskom or any third party at risk.
In response to questions she admitted that she put political pressure on Eskom last year not to cut the supply to municipalities who fail to pay the bulk electricity bills to Eskom. She said while it is unfair to paying customers in those municipalities, the Eskom board has informed her that it intends to limit supply to 20 municipalities that are serial defaulters, from June 5.
She still hopes that it won’t be necessary and is working with the National Department of Cooperative Governance and Traditional Affairs and Treasury to find a solution. They are to meet with the municipal association Salga that represents municipalities.
Brown said Eskom has liquidity problems and it has to collect the money it is owed. She said some municipalities however have systemic problems and use the money to pay salaries, as they are not viable in the first place.
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