Eskom’s new boss walks into irregular expenditure mess

The National Union Mineworkers (NUM) has implored Dan Marokane to develop strong financial controls to put an end to Eskom’s notorious culture of irregular expenditure, labour union energy sector coordinator, Khangela Baloyi said in an exclusive interview with Sunday World this week.

The union, an affiliate of Cosatu, made this call as the board of the struggling state-owned power utility met on Friday to welcome Marokane as he officially assumed the position of group CEO.

On March 1, Marokane walked for the second time into an Eskom that has a cumulative balance of irregular expenditure amounting to R91.2-billion, most of it relating to historic transgressions, according to the company’s integrated annual results.

 The irregular expenditure, which was incurred during the 2023 financial year, totalled R5-billion, according to the company’s annual results.

 “Nonetheless, the cumulative balance of irregular expenditure remains high, mainly due to limited progress in receiving the necessary condonations and removal of historical irregular expenditure. Regrettably, obtaining the necessary supporting documents for historical matters remains a challenge.

“We are committed to rectifying past mistakes and ensuring accountability. During the year, Eskom received notice of condonations to the value of R246-million,” read the report.

 Related to fruitless and wasteful expenditure, Eskom’s closing balance amounted to R6.8-billion at year end, of which R105-million, relating to nine incidents, has been reported for the year under review. The balance for the comparative period has been restated by R1.7- billion, with 75 matters incurred in prior years which were only confirmed in 2023.

 The company stated that losses due to criminal conduct of R6-billion were reported during the year, of which the majority related to non-technical energy losses.

 Baloyi said though they believe Marokane has the capacity to turn things around at Eskom, he needs to stop the ballooning irregular expenditure that has plagued the company for years.

 “He needs to just make certain there is financial discipline in the company,” he said.

Baloyi also advised Marokane to prioritise ending loadshedding. “He needs to prioritise the generation executive maintains the power stations and move out of 16 000 to 17 000 megawatts breakdowns to 10 000 megawatts breakdowns. That will automatically resolve the issue of loadshedding,” he said.

Welcoming Marokane, the Eskom board chair Mteto Nyathi said: “The board is pleased to announce the arrival of Eskom group chief executive, Dan Marokane, who officially assumes his role today.

“He rejoins Eskom at a time when the organisation faces an existential challenge and is undergoing significant changes that require hands-on, bold and decisive leadership,” said Nyati.

Nyati expressed confidence in Marokane’s abilities, as well as in the leadership and staff of Eskom, emphasising their collective commitment to turning the organisation around.

“We expect Dan and his leadership team to accomplish at least two critical tasks. First, they must address the current business challenges. Loadshedding must become a thing of the past. Second, they need to reposition and restructure Eskom to enable growth and sustainability,” said Nyati.

 He said the board needs Marokane to prioritise several key areas in the first 100 days, these including assessing the generation operational recovery plan, reviewing Eskom’s unbundling plans and engaging with internal and external stakeholders.

“These first 100 days are crucial for helping him gain the necessary insights about Eskom and the industry.

“He should be able to engage with the media at the end of this critical period.

“Dan has the full support of the Eskom board.

“Eskom employees are excited to welcome him back to the organisation.

“We invite all South Africans to rally behind him as he steers Eskom towards stability, reliability, and sustainability,” said Nyati.

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