“One has to ask the question ‘is Eskom, as it’s currently structured, manageable’? In my opinion, the answer is, no. The structure of Eskom is entirely inappropriate for the modern world that we live in. Eskom is structured in the same way as it has been for the last 50 years and in that 50 years, not only has the industry in South Africa radically changed, but in fact the whole world,” EE Publishers’ managing director, Chris Yelland, told CNBC Africa.
The power utility, which generates approximately 95 per cent of the electricity used in South Africa and approximately 45 per cent of the electricity used in Africa, recently said that it had applied to the Department of Environmental Affairs for a license that complied with environmental regulations.
This was after it found that its Kriel based power station did not comply with the requirements of its atmospheric emission license and was in danger of being shut down.
Eskom is also in search of a new chief executive officer after Brian Dames announced on 5 December 2013 that he would be stepping down for personal reasons.
With Dames’ resignation set to take effect in March 2014, the likes of Dan Marokane, Eskom’s chief commercial officer and Transnet group chief executive, Brian Molefe, have been touted as possible replacements for him.
Yelland however, feels that the power utility requires more than just a manager, and that Dames’ replacement would need to be well-equipped for the job.
“We need a person that is politically well-connected. We’re not just talking about another manager. We need a person who can convince not only the cabinet but Eskom senior and middle management as well as labour that major restructuring is necessary. Someone with skills, understanding of the public sector, understanding of the private sector, international finance, local finance, business,” he explained.
“Eskom, as it stands, needs to be unbundled. The new CEO, in my view, his mission is going to be to break up Eskom into manageable units, into a generation-sector that is competitive, taking distribution out and creating a number of regional electricity distributors, in other words, rationalising the electricity distribution industry. This is the official government policy that has been in place for the last 15 years but has never been implemented.”
He added that Eskom needed a leader with a vision, someone who could radically restructure Eskom to meet modern needs.
“We should ask ourselves the question ‘what are we looking for a CEO for’? In other words what kind of organisation is this? We’ve seen the past two CEOs depart in a short space of time, each lasting about three years, long before their normal term of office and certainly that means they haven’t succeeded in their task,” Yelland indicated.
“We’ve got to really get to the bottom of what are we looking for. Are we looking for another manager or are we looking for a leader with a vision, not just of Eskom but of the entire electricity supply industry of South Africa and the region.”