S.Africa: Electricity: How Eskom killed its greatest assets

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Eskom lost many skilled engineers because of corruption, affirmative action, black economic empowerment (BEE), and a crackdown on those who challenged what was going on.

During the Zuma years, Eskom became a feeding trough for the ruling ANC and politically connected individuals. It continued after Cyril Ramaphosa became president.

Former Eskom CEO Andre de Ruyter said there was knowledge and support for corruption at Eskom at the highest levels of the ruling party and the government.

Former Mpumalanga premier and ANC NEC member Mathews Phosa also said there are direct links between Eskom corruption and ANC ministers and premiers.

To keep this corrupt system going, opposition to decisions which suited the connected individuals was not tolerated.

Professor Mark Swilling, co-director at the Centre for Sustainable Transitions at Stellenbosch University, said this caused great harm to Eskom.

He said there was a problematic period of three years at Eskom – between 2013 and 2015 – when several key personnel, especially engineers, left.

Many of these skilled professionals and engineers were suspended and left through no fault of their own.

“Many senior Eskom employees like Steve Lennon, Brian Dames, and many others took early retirement or were retrenched,” he said.

“In the beginning, it was just good engineers who were accused of things they were not guilty of. Later, even strongly ANC-aligned professional staff started to be targeted.”

As word got out that even ANC-aligned professionals could get targeted, it created fear and paralysis within Eskom.

“Everybody retreated to their corners, resisting taking initiative and risk and not making any creative decisions.”

This was because if anyone was seen as stepping out of line, challenging what was going on, or presenting information which was unwelcome, it could result in severe consequences.

“Former Eskom CEO Matshela Koko was famous for holding unsigned letters of resignation by senior staff. All he had to do to get rid of them was to add his signature,” Swilling said.

That “rule by fear” environment destroys talent and pushes skilled employees, like engineers, out of the system.

Professor Mark Swilling. Source: World Economic Forum/Walter Duerst
Aggressive BEE and AA programmes

During the Zuma years, Eskom also implemented aggressive affirmative action and BEE programmes.

Eskom managers were pressured to “balance the numbers” to meet affirmative action targets, especially in technical fields.

Between 2011 and 2013, the number of employees at Eskom increased by 4,488 – from 41,778 to 46,266.

Many of these additional staff members were employed in three months at the start of 2013 to meet racial and gender targets. Skills were not important – only affirmative action targets.

This was not enough, and in 2015, media reports revealed that Eskom was planning to cut the number of white engineers and managers and decrease the number of white tradespeople.

Cutting skilled white employees was needed to comply with South Africa’s strict provisions of the country’s Equity Act.

The Department of Labour required Eskom to set numerical targets so that the makeup of its workforce would more closely match that of the country at large.

In 2019, another report surfaced that Eskom was planning to drastically cut the number of skilled white engineers and managers to meet its affirmative action targets.

The white employees whom Eskom allegedly targeted included engineers, tradespeople, academically qualified staff, and middle management.

Although Eskom denied it had a plan to get rid of white staff, many white employees resigned as they felt affirmative action was limiting their career prospects.

Trade union Solidarity said Eskom struggled to recruit and hold onto skilled engineers — particularly white employees.

“Eskom’s recruitment and promotion policies, EE targets and AA appointments, and procurement policy has made the environment in Eskom impossible for white engineers,” said Solidarity.

The result was that Eskom lost the skills of many highly qualified and experienced engineers whose skills were in high demand.

Severe lack of skills

Andre de Ruyter Eskom
Former Eskom CEO Andre de Ruyter
Today, Eskom has a severe lack of engineering skills and continues to suffer because of what happened a decade ago.

Many top Eskom executives, including former CEO Andre de Ruyter and former COO Jan Oberholzer, highlighted a lack of skills as a key reason for the power utility’s problems.

Swilling said there was a strategy to bring in experienced engineers who used to work at Eskom, many of whom were white, to train new black engineers. However, it did not work well.

“Everything depends on the relationship between the skilled engineers, who may have an ‘I told you so attitude’, and the young upcoming professionals,” he explained.

These young professionals are now under immense pressure to keep the power stations going despite their lack of experience.

Energy analyst professor Sampson Mamphweli said Eskom no longer has the skills required to run a large power utility.

“The fact that maintenance runs overtime and over budget, while also being of poor quality, reflects the lack of skills at Eskom,” he said.

He also said the exodus of skilled employees began over a decade ago when the utility underwent a transformation process.

As part of this agenda, Eskom trained black engineers and pushed them into high-ranking positions within the organisation.

“In that process, Eskom lost some good white engineers who chose to work overseas or in the private sector due to the increased political interference at the utility,” he said.

Black engineers have also begun to leave the utility because of the deteriorating working environment, heightened political pressure, and low employee morale.

Oberholzer also highlighted the need for well-qualified and experienced staff to turn Eskom around.

He said employees are Eskom’s most valuable asset and urged the organisation to ensure that staff are qualified, experienced, and happy.

Source: https://businesstech.co.za/news/business-opinion/722020/how-eskom-killed-its-greatest-assets/

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