| OPINION/ ANALYSIS
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Hogan can no longer evade her obligations
November 13, 2009
By Justin Brown
Public Enterprises Minister Barbara Hogan was justifiably outspoken when the Dalai Lama was refused entry to South Africa, but during the Eskom leadership crisis she has demonstrated no mettle.
There is a lot at stake as the power utility is the largest state-owned business in the midst of a R400 billion expansion that it does not have the means to fund.
Hogan has demonstrated no public leadership over the past two weeks when ex-chief executive Jacob Maroga was at odds with former chairman Bobby Godsell and Eskom's board.
It remains to be seen whether her behind the scenes approach on this matter will stand the test of time. The lack of communication during this collapse, either by the parastatal or the minister, is worrying.
It is really sad and disturbing to see that the differences between Godsell and Maroga ultimately boiled down to baseless claims of racism aimed at inflaming passions and polarising rather than the merits of the critical issues at hand.
It is vital that Eskom has able leadership to inspire confidence among citizens and investors, especially as the utility is seeking to win support for a proposal to more than treble power prices between now and April 2012.
If its leaders handle themselves without care and consideration, how are they going to handle the entity and its expansion? In the light of this the prospect of Eskom winning approval for a hefty tariff increase from the state energy regulator is rapidly fading.
Godsell joined the utility as chairman 15 months ago with 33 years experience in the mining industry at Anglo American and AngloGold Ashanti.
His local and international management experience developed during this time would have been a valuable asset, especially in calming this turmoil. However, what was always going to be tough for him was dealing with the parastatal politics.
Before he took the job, Godsell should have asked himself how he would chart a course to avoid ugly pitched battles for which the SABC and Transnet, in particular, have become notorious.
Given that Maroga has been at the helm during three different crises in the past two years it is hard to see why he was still in his position for so long.
First there was the power crisis in January last year as a result of severe coal shortages that cost the economy R50 billion. Maroga was warned of the coal supply risk in 2007 but chose to ignore its importance.
Then late last year, Eskom was left high and dry without means to fund its expansion programme as the global credit crisis hit. Maroga should have ensured that each expansion project had a firm and robust funding strategy in place.
Finally, Maroga was at the centre of a board battle that has already had a negative effect on Eskom, its expansion programme, general confidence and sentiment in the country. Adding to this is that his agreeing to resign and apparently changing his mind is not the hallmark of a reliable leader. Maroga's unequivocal resignation should be welcomed.
Like the decision in the late 1990s taken to hold off on allowing Eskom to expand, the cabinet has to be held accountable for the power producer.
President Jacob Zuma and the government ministers ultimately have the fiduciary responsible for the entity.
Hogan needs to quickly restore confidence in the entity and its expansion plans. She cannot let the energy utility continue to underperform like the SABC and Transnet.
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