Eskom: who is in charge and what are they doing?
November 20, 2009
Some commentators have questioned the wisdom of Eskom's former chairman, Bobby Godsell, submitting a strategy document to the board of the state-owned enterprise, competing with one penned by former chief executive Jacob Maroga.
Godsell submitted a letter outlining his thoughts on the role of the board versus the executive, and a list of issues the board had mandated the executive to follow up, and was still awaiting. It was labelled "notes to the board".
If Godsell had a different strategy to Maroga's to save Eskom, he certainly did not put it into writing (or at least there is no evidence he did). By comparison, the document Maroga submitted to the board was clearly labelled a strategy document (not a particularly good one, but nonetheless a strategy document).
Why this matters is that some commentators and organisations now claim that Godsell, in penning a so-called strategy document, undermined Maroga by infringing on his executive functions - and have berated the board for allowing Godsell to do so. And so a seemingly minor distortion allows this leap to what might otherwise be a wobbly conclusion.
Another matter, perhaps more glaring, was highlighted this week by Susan Olsen, the US consultant whose 2007 memo warning of problems in Eskom's primary energy division was ignored by the utility. Writing on Moneyweb, she was adamant she had not been fired by Maroga - as claimed repeatedly by the opposition DA.
In fact, Olsen appears to come to Maroga's defence over the matter. Pointing out he had been in the job only for a couple of months, she speculates that the senior staff of the primary energy unit had probably assured Maroga that her memo was incorrect and that, in any event, the problems were being rectified. "New chief executives are inclined to trust their senior staff and I imagine he did just that," she says.
Why this matters is that firing an individual over a report she has written implies some sort of cover-up by the person doing the firing - but Olsen's comments provide the context of a collective malaise in the run-up to last year's blackouts.
Return of a veteran
It felt like Gill Marcus, the new governor of the Reserve Bank, had never left Parliament when she returned to the Old Assembly chamber to meet the finance and appropriation committees of the National Assembly and the National Council of Provinces yesterday. She noted she was back in the front chairperson's bench, but in a different room of Parliament.
One ANC MP asked whether there was a gender sensitive name for "governor", to which Marcus, who was a chairwoman of the finance portfolio committee before becoming finance deputy minister, chuckled and said: "The problem is governess means something completely different." She has a bit of an air of a governess, firm and at once, gentle, but doesn't give anything away that doesn't need to be.
Asked by another MP what the Bank of International Settlements was, Marcus patiently explained that it was like a central bank of all the central banks of the world, but when asked by a new MP, Tim Harris, whether sharp interest rate hikes previously imposed by the bank's monetary policy committee had worsened the recession, she gave him short shrift. She said she "would not like to comment on that. (It is) not appropriate at all".
She hinted that her bank would be more open to discussion about the mandate of the bank, promising that civil society, labour, business, and Parliament would be consulted.
She would ensure the bank would "meet with people", signalling that their concerns about unemployment, growth and the using a blunt interest rate weapon to fight inflation would at least be canvassed.
There was a murky exchange between her and Dennis Bloem, a former Correctional Services chairman who crossed from the ANC to Cope this year. He declared her "an independent thinker", to which she retorted that she was pleased he was pleased that President Jacob Zuma had appointed her to the post of governor.
But she emphasised that independent decision making should not be seen as the bank being in the opposition camp.
Just wait and see
The significant drop in contribution from SABMiller's South African hotel and gaming operations does rather stand out in the latest set of interim results and naturally raises the issue of why SABMiller continues to hold on to this non-strategic asset.
Presumably because, even though it's going through a tough time right now, things are likely to improve next year.
And even though it is not a strategic part of the business, as with the Distell stake, the group is under no pressure to dispose of it. Management can wait until it gets a sufficiently enticing offer.
Criticisms of the group's purchasing strategy seems justified by the continuing high prices being paid for raw materials; things may improve with plans to create a more centralised system under the management of Tony van Kralingen.
The drop in gearing is encouraging and does reinforce SABMiller's standing as the most likely candidate to acquire Mecian-based Femsa.
And don't you just love Norman Adami's comments about competition? "We are now moving to a stage where competition is moving to a new level."
In case you can't guess that's a reference to Heineken, which is now producing Amstel in Gauteng. No doubt Shan Ramburuth, the competition commissioner, is watching closely and will be delighted to know this.
And the rest of us will be watching just as closely to see what SAB does this time around.
Never before has it been faced with a well-resourced world-class competitor on its back door and competition authorities who are a little more robust than the old Competition Board.
Edited by Peter DeIonno. With contributions by Ingi Salgado, Donwald Pressly and Ann Crotty
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