December 2019. It’s difficult to think of a time since 1994 when we as a country have approached the New Year so alive to the threats that we face, and the consequences of failing to meet them.

An economic malaise – possibly a recession – a fiscal cliff, the final downgrade to junk status on the horizon, 29% unemployment, broken state-owned enterprises and frayed institutions. There is not a great deal to cheer us.

In the public mind, for both symbolic and practical reasons, nothing encapsulates the state of affairs quite like Eskom. A steady power supply is a minimum condition for a modern society, and the failure to provide it damages just about everything. When load-shedding hit a couple of weeks ago, it plunged the country into a real, tangible darkness (we often forget just how dark the night can be), and cast a pall over the future. The failure of the power supply to a country confronting problems of the magnitude that we have is making a lousy situation that much worse.

The malaise at Eskom is, unconscionably, a long-standing one, its nature being nauseatingly familiar to all. (President Cyril Ramaphosa even resurrected the dubious ‘sabotage’ conspiracy.)

And, not for the first time, government is talking tough. So much so that it told   Eskom’s management to call off their Christmas holidays, and said that the body’s CEO-designate, Andre De Ruyter, should come on board before his planned 15 January debut.

De Ruyter has been a contested choice. His career, depending on who you ask, was inspirational or terrifying, as were the fortunes of Nampak under his stewardship. One can find evidence to support both sides. But, in a fashion befitting South Africa’s political caste, the big public issue had less to do with his professional competence and likely ability to rescue the flailing behemoth, than with a default to race. The South African Energy Forum – which bills itself as ‘a group of concerned experts from the energy, civil society and business community’ – had this to say: ‘We note with disbelief the appointment of Andre Marinus de Ruyter as the Eskom CEO. The track record that Pravin Gordhan has in ignoring capable black executives, while purging other black executives, remains 100%.’

Strong stuff. The National Union of Metalworkers of South Africa weighed in even more harshly: ‘What we want to categorically and unapologetically state about the appointment of Andre de Ruyter by the Eskom board is that such an appointment constitutes nothing less than a setback in the history of the transformation agenda in this country. His appointment constitutes an insult to many competent black executives – in particular black women. Numsa rejects the re-surfacing of the old apartheid order where in the workplace, in this country, it was a custom and practice that the majority of workers sweat and toil to deliver competitive, quality production but when it comes to senior management and executive appointments, white males are given preference over blacks.’

Others echoed these themes.

Contestation over the appointment forced the government into a contorted position. De Ruyter’s appointment was a case of fit-for-purpose, and absolutely in line with its non-negotiable position (absolutely non-negotiable, mind!) on transformation. ‘We have affirmed black people in our state-owned enterprises. This time around we have come up with the person who we think has the appropriate skills,’ President Ramaphosa told a meeting of the South African Communist Party.

Another source from within the African National Congress (ANC) told the media that De Ruyter’s candidacy had been widely circulated and endorsed. ‘This is not about race or transformation. Eskom is in trouble, it needs the best person for the job.’ 

In fact, channelling the Chinese, President Ramaphosa added that ‘it doesn’t matter if a cat is black or white so long as it catches mice’.

All of which would be hard to square with government policy, which has made the colour of the cat of profound, totemic, importance.  Also critical was the cat’s political orientation and acceptability, codified in the ruling party’s counter-constitutional practice of ‘cadre deployment’. (As it happens, the unnamed ANC source quoted above indicated that De Ruyter had been cleared by the ‘deployment committee’. This should alarm us all.)

As one ANC Member of Parliament put it in 1997, ‘it is imperative to get rid of merit as the overriding principle in the appointment of public servants’. Well, in this at least, the ruling party can claim some success. So can President Ramaphosa, who headed up the party’s deployment committee for a large part of the incumbency of former President Jacob Zuma.

At Eskom, racial and political referencing has come at a price. From paying elevated prices for coal, to the loss of skills and institutional memory, to the fiscal and design quagmires of Medupi and Kusile, these have enabled (or provided a veneer of legitimation for) a slew of pathologies, many associated with the so-called ‘state capture’ agenda.

This was pretty much inevitable, in view of the experience of similar policies elsewhere in the world. And even without the malfeasance that became harnessed to them, they have pushed Eskom’s focus decisively away from its core mandate – providing South Africa with an affordable, reliable supply of energy.

More than this, the empowerment imperative has created a patronage-based incentive to lock South Africa into coal-fired power. For those concerned with the implications of this for the adoption of new technologies – not least renewable sources, with an eye on environmental sustainability – the comments of Dr Jeff Rudin or the left-wing Alternative Information and Development Centre are worth noting: ‘One of the reasons for Eskom’s hostility to renewable energy is BEE. Eskom’s support for BEE (apart from its corruption-tainted Gupta links) is perhaps best illustrated by its unilateral imposition of a 51% minimum threshold of black ownership by any company wishing to be an Eskom supplier. The extra costs of BEE business by an already heavily indebted company are not part of supply-chain calculations. Extra costs are just passed on to the public, thereby making electricity even less affordable to even more people.’

(An aside: Eskom recently said that the systems to keep down Medupi’s sulphur dioxide emissions were unlikely to be installed before the end of the coming decade, and even after this is done, it wanted the right to pump out eight times the legal limit, indefinitely.)

Unfortunately, there is little indication that any significant rethinking of this policy direction is at hand. True enough, it shows the contradictions of policy – that race, so much the keystone of policy, might be dispensed with as the overriding consideration under appropriate circumstances. (As it happens, some 27 black candidates were reported to have been considered for the Eskom job, but every one turned it down. Reasonable enough, that.) Indeed, after having defended De Ruyter’s appointment, the president went on the offensive and repeated the established line that the private sector needed to transform faster. His point of reference here was data from the most recent report of the Commission for Employment Equity – a document that sets out in remarkable detail the deficiencies in demographic representivity of South Africa’s workforce, but offers nary a word of analysis as to why this is the case, still less what can be done to achieve it.

Helpfully, Mr Ramaphosa’s government has a solution. More punitive application of edicts on employment and ‘strengthening’ BEE. Which is very familiar territory, and which will likely bring familiar results. (With talk of bringing independent power producers onstream to help stave off disaster, one must ask whether this will be conditional on their BEE status…)

De Ruyter’s appointment signifies little other than that he has been appointed. Whether he will ‘succeed’ remains to be seen – and if he does, it will probably hinge on whether he is willing (and permitted) to make and carry out some deeply difficult, highly unpopular and bitterly unpalatable decisions. And there is no guarantee that government will back him in this.

But the crisis at Eskom – near existential as it is – demands that South Africa be willing to engage honestly and critically about what has gone wrong, how it can be fixed, and the trade-offs involved. In this, race policies and the pursuit of political control cannot be overlooked. It is a challenge at which the country cannot afford to fail.

Welcome to 2020!

[Picture: Gerhard Roux, https://commons.wikimedia.org/w/index.php?curid=3481556]

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Terence Corrigan
Terence Corrigan is the Project Manager at the Institute, where he specialises in work on property rights, as well as land and mining policy. A native of KwaZulu-Natal, he is a graduate of the University of KwaZulu-Natal (Pietermaritzburg). He has held various positions at the IRR, South African Institute of International Affairs, SBP (formerly the Small Business Project) and the Gauteng Legislature – as well as having taught English in Taiwan. He is a regular commentator in the South African media and his interests include African governance, land and agrarian issues, political culture and political thought, corporate governance, enterprise and business policy.

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