VIJAY NAIDOO: Good Business Basics – Restoring Eskom not purely a management or financial exercise any longer

Media reports in the weekend papers that Eskom CEO Andre de Ruyter had discovered a listening device in his personal vehicle serves to underscore the complexity of the challenge to fix Eskom. Essentially, to be able to fix Eskom it will first need to be taken back from the criminals who have captured it.

Let me explain.

Over the past 10 years or so, the entire ‘value chain’ that makes up Eskom has been infiltrated, influenced and eventually taken over by people who have no interest whatsoever in the ultimate deliverable, that is a sustainable power supply to the country.

What they do have an interest in are the components of the value chain that comprise the billion dollar operating budget, and the ways to skew and plunder these to their personal financial agendas.

It is no surprise then that Eskom was the apex target in the Gupta State Capture project, and no expense, and if money could not get the results, intimidation and dirty tricks, were spared in pursuit of its objective.

The Guptas brought the economic concept of vertical integration to their corrupt enterprise, by seeking to extract value at every point of the value chain, from the supply of coal to the multi-billion operational loan facilities that were hijacked by their associates such as Trillian and Regiments Capital.

Sadly, while the tentacles of the Guptas are slowly being unwound by the security and justice departments, their legacy lives on, as the vacuum they have left has been readily filled by even more sophisticated criminal enterprises, who are now benefiting from the crisis Eskom has been left in by the earlier Gupta forays.

Hence, we are now dealing with the coal mafias, ruthlessly exploiting Eskom’s weak bargaining position and desperation, and the diesel mafias who are seeking to control the virtually insatiable appetite Eskom has for the fuel to keep the grid from collapsing.

The fact that experts have noted that the bug found in the CEO’s car was of a level of sophistication usually only available to State security actors (read CIA,NSA), gives an indication of the resources available to those willing to preserve the status quo.

Then you have the contractors and suppliers who are sustaining Eskom as it grapples with breakdowns at its various plants.

It is very much a ‘write your own cheque’ situation, as many of these suppliers are sole suppliers to Eskom.

Now, we are also told by the President that another R40bn is needed to FINALLY finish and fix Medupi and Kusile – the two newest power plants already hundreds of billions over budget, and years late.

Is there any surprise here, as many millionaires have been made from providing security, transport, housing and food to construction workers, and why should the party stop now.

Restoring Eskom is not purely a management or financial exercise any longer.

It is essentially a battle between the current beneficiaries (criminal enterprises in all shapes and form) and the actual owners (the State and citizens), and treating it in any other form is fruitless.

Vijay Naidoo is the CEO of the Port Shepstone Business Forum. He writes in his personal capacity. The views expressed are the author’s own and do not necessarily reflect those of this publication.

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