File picture: Bhekikhaya Mabaso/African News Agency (ANA) File picture: Bhekikhaya Mabaso/African News Agency (ANA)
JOHANNESBURG - The South African government has repeatedly stalled the appointment of a new chief executive officer at the debt-stricken state power utility, evidence of how politically fraught the process has been.
Loss-making Eskom Holdings SOC Ltd. poses the biggest risk to the economy and naming a permanent CEO to turn it around is widely seen as a top priority for President Cyril Ramaphosa’s administration. The government has missed several self-imposed deadlines to fill the post.
“The delay in announcing the CEO is another clear indication of the power struggle around Eskom,” said Darias Jonker, a London-based director at Eurasia Group Ltd. “Competing interest groups each have their preferred candidate and Ramaphosa is yet again wavering over a key government decision.”
Video by: Chelsea Lotz, Business Report TV
Eskom, which supplies about 95% of the nation’s economy, owes 450 billion rand ($30 billion) that it can’t afford to service and is struggling to meet demand for electricity from its old and poorly maintained plants. The government has said it is too big to fail and has allocated it 138 billion rand in bailouts over the next three years to ensure it remains solvent.
Ramaphosa said almost a month ago that the appointment would be made “soon,” a pledge he’s repeated several times since, while Public Enterprises Minister Pravin Gordhan told Johannesburg-based radio station 702 the name would be announced by Nov. 10. And Jackson Mthembu, a minister in the presidency, said on Oct. 31 that the cabinet had made its selection -- but it remains under wraps.
Among three candidates shortlisted are former LNG Canada CEO Andy Calitz and Jacob Maroga, who was Eskom CEO from 2007 to 2009. Jabu Mabuza, the utility’s chairman, has filled the post in an interim capacity since Phakamani Hadebe quit in July.
Eskom referred questions about the appointment to the Department of Public Enterprises. Its spokesman didn’t immediately respond to a request for comment.
The new CEO will help oversee government plans to split Eskom into generation, transmission and distribution units under a state holding company -- a breakup opposed by powerful labor unions who see it as a precursor to privatization and job losses.