Eskom briefs Committee on annual report and financial statement
On 21 November 2018, the Portfolio Committee on Public Enterprises was briefed by Eskom on the company’s annual report and financial statement for 2017/18.
Briefing the committee, Mr Phakamani Hadebe, the Chief Executive for Eskom, said the power utility has experienced difficult years following leadership and governance instability. A new board and leadership team was appointed to clean up, stabilise and set Eskom up for future growth. Despite experiencing a difficult year, there was improved liquidity, and continued improvement in operational performance at Eskom. There was also advancement in governance and control systems.
Mr Hadebe said a strategic review and Phase One, which will deliver a blueprint for the strategy, including a short term turnaround, is under way. This has been taken to the board, which will then culminate in a corporate plan that will be finalised in February 2019, in line with PFMA (Public Finance Management Act) requirements.
In response to the briefing by the power utility, members of the committee commended Eskom for its honesty during its presentation. The Chairperson of the committee, Ms Lungi Mnganga-Gcabashe, said: “We welcome the honesty on the challenges the company is faced with, this should be the norm.”
The committee was of the view that what the company is experiencing are the effects of state capture in the country. Members of the committee suggested that the Hawks (Directorate for Priority Crime Investigation) and National Prosecuting Authority should be invited and appear before the committee on investigations conducted regarding Eskom. The committee said it is disgraceful that there have been no arrests on the matter where there is substantial evidence.
Ms Mnganga-Gcabashe said a joint portfolio committee meeting needs to be organised in order to address issues that have been raised by the committee relating to investigations into Eskom and the municipal debt which has come out in this engagement, and when the committee met with the department last week.
In its presentation, Eskom said 11 implicated senior executives exited the company and the finalisation of outstanding disciplinary hearings relating to senior executives has been accelerated. Eleven criminal cases have been opened, five of which involve nine senior executives. In total, 1 049 disciplinary cases since April 2018, of which 822 have been finalised, resulting in 97 employee leaving the employ of the company.
Mr Hadebe said in ensuring the power utility becomes a trusted state-owned company, remedial action has been taken against 25 staff members doing business with Eskom, seven have left the company. Lifestyle audits of senior management are in progress.
Members of the committee said regarding load shedding, it is important for the power utility to constantly inform and update the country on what is happening.
On the issue of privatisation, the power utility said it was not able to give a response on the matter as it belongs to the shareholder.
Regarding the Independent Power Producers (IPPs), questions of clarity were raised on the costs. Some members of the committee raised concern on the costs of IPPs. Members of the committee were of the view that the IPP programme should not weaken the power utility as a whole as there were reports in the public domain that Eskom purchases from IPPs at an increased amount and sells cheaper to consumers.
