Power utility vs BBI pits two cash-strapped SOEs against each other

Embattled state-owned entities Eskom and Broadband Infraco (BBI) are engaged in a tit for tat battle over debt owed by the telecoms company to the energy producer.

Eskom has terminated services it provides to BBI over long-standing debt, in a rare case that pits South Africa’s cash-strapped state-owned entities against each other.

BBI deploys a long-distance telecommunications network spread across the country to meet its aim as laid out in legislation. This is done through a network of about 15 000km of fibre optic cable, making up various routes on the network.

The embattled Eskom owns some of the fibre optic cables making up the routes on the BBI network and BBI requires Eskom to provide the lease services for the cables it owns, and requires Eskom to maintain and services those cables.

Eskom ceased to provide services to BBI in 2022, resolving it will not do so until BBI settles the outstanding disputes.

The South Gauteng High Court in August ordered Eskom to resume providing the services contemplated by the maintenance agreement concluded between the parties in 2018, pending the conclusion of the dispute resolution process.

Eskom did not do so, forcing BBI to go back to court and successfully argued that Eskom’s then acting CEO Calib Cassim was declared in contempt of court in a judgment handed down in November.

Unfazed, Eskom asked the court for leave to appeal, a bid which was rejected on Friday by judge Ingrid Opperman.

The judge said Cassim treated his BBI counterpart, Gift Zowa, with disdain, saying such behaviour left a lot to be desired. “I have considered the grounds for leave to appeal dispassionately and nothing argued has persuaded me that there is a reasonable prospect that another court would or might come to a different conclusion. Most of the issues raised in the notice of application for leave to appeal have been dealt with in the judgment and I need not deal with those aspects again
herein,” Opperman ruled.

“I did not grant punitive costs in the judgment because I was not asked to do so if the relief granted were limited. The issue of costs remains discretionary and having regard to all that has been said and although Mr Cassim’s conduct towards his colleague Mr
Zowa as described in the judgment is worthy of censure, I drew a line in the sand with my previous order and intend being consistent in respect of the scale of the costs.”

Marokane inherits an out of commission Eskom

Eskom on Friday opted for trusted hands, tapping its former executive Dan Marokane as its new CEO, arguably one of the toughest jobs in South
Africa, with his immediate challenge to increase the energy availability factor.

Marokane is jumping from the frying pan that is Tongatt Hullet into the fire that is the cash-strapped, highly indebted Eskom, which is the process of unbundling into three entities responsible to transmission, distribution and generation.

Eskom interim chair Mteto Nyati said Marokane has experience in managing complex strategic, operational and commercial turnaround across the private and public sectors.

“He also has in-depth knowledge of the Eskom environment. He leads from the front. He will hit the ground running. That is what Eskom and South Africa need right now,.

“We are delighted to have him on board and are confident that he, the executive committee and the board will work well together in rebuilding an Eskom of tomorrow that is anchored on high performance culture.”

Marokane, who is in his 50s, is a seasoned executive with over 20 years in the oil, gas and power industries in various operational and strategic leadership roles. He previously served as chairman of Eskom Enterprises board, and the Eskom Roshcon and Rotek Industries board.

He left Eskom to join Tongaat Hulett as an executive in January 2018 as the company faced a near death experience due to the fraud and bad management of its former executives who are currently facing criminal charges.

Marokane said it was an honour to be appointed to lead Eskom, which has been struggling to power the economy for more than a decade.

“I look forward to working with the leadership team, Eskom board, the shareholder and other key stakeholders to accelerate implementation of the Generation Recovery Plan, the creation of transmission capacity as well as other critical Eskom priorities and chart a path to a sustainable future for Eskom. If it is to be, it is up to us,” said Marokane.

Eskom’s top job has been a poisoned chalice for many who came before Marokane, the latest being André de Ruyter, who left the role earlier this year with a tail between his legs after a public fallout with his bosses and political principals. Eskom has had more than eight CEOs in the past decade, going from one crisis to the next.

Marokane, who is well respected in the energy space and for his ethical leadership, will have to strike a close relationship with the powers that be in government, ranging from the ministers of electricity, public enterprises and minerals and energy.

He inherits a workforce of more than 40 000 employees who have often been a butt of jokes and have a low morale.

Eskom, alongside Transnet, has been cited as the biggest risks facing Africa’s most industrialised economy.

Eskom is in a dire financial state, having recently reported a R23.94-billion loss for its last financial year, which ended in March 2023, as its expenditure on diesel to keep the lights on burned a hole in its books.

Generation performance continued to deteriorate, with the overall energy availability factor declining to 56.03% versus 62.02% in 2022. These and
other operations challenges are what Marokane will have to contend with and resolve if he is to be successful in the role where many before him tried and failed.

Ridding the utility of corruption will also stand Marokane in good stead

Visit SW YouTube Channel for our video content

Latest News