We are sorry: Eskom

[Vox Populi Vox Dei]

Yes, where is good old Toematt-Pietersen? Most useless Minister ever (and that is saying something!). She completed screwed up the Fisheries department.

Arthur...I think you have too much faith in Eskom. Acting as if all the employees are hard-working. Sure some are, but some aren't pulling their weight - like in any organisation. I'd really like to know how you could justify the huge bonuses to the SENIOR people in the organisation...surely one of their KPIs is you know...keeping the lights on?

Your 1980s Eskom doesn't exist anymore.

 

[Sherbang]

Are the exec's still getting bonuses at tough times like these??

I would love to know what went wrong with Eskom, was it that they were denied the chance to expand their power grid, if they had such plans, or did they just sit and not plan for the expanding population?

Here is a clue as to what went wrong:
http://en.wikipedia.org/wiki/Thabo_Mbeki#Electricity_crisis

But Mbeki also admitted the government had failed to heed warnings from Eskom (the earliest 10 years previously) that without new power stations Eskom might not be able to meet demand by 2007. Each year over the preceding 10 years, Eskom had produced annual Integrated Strategic Electricity Plans each setting out scenarios of future investment requirements to cope with projected increased demand, but although projections of average demand growth in the period 2001–2005 had been accurate, no investment had been forthcoming.

Mbeki failed to respond to allegations that the government's black empowerment strategy had been a root cause of the problem in that small and medium sized black entrepreneurs, in preference to large corporations, had been awarded coal supply tenders. The policy of giving preference to small suppliers had caused problems in securing reliable supplies of coal, and had also, because small suppliers did not have the capital to invest in rail or conveyor belts infrastructure but used coal trucks, accelerated the wear and tear damage to the roads around the power stations. Warnings highlighted in several of Eskom's annual reports, starting in 2003, had been ignored not only by the Eskom board but also its political masters, Mbeki's government.

The power problems were further exacerbated by Mbeki's government policy of attracting energy-intensive industry (such as Aluminium smelters) through the carrot of cheap electricity. This meant that, as Eskom's excess capacity ran out and became a deficit, the South African government finds itself contractually bound to provide power to energy-intensive industries. Despite this meaning the rest of the country experienced traffic problems and business disruption due to the blackouts. For South Africa to remain a desirable foreign investment destination the country must be seen to honour its contractual obligations. To shut down the smelters is not a simple process, said one analyst. Government would be paying the cost of effects all through the relevant parties aluminium value chain – its aluminium refineries and bauxite ore mines in other countries.

 

[ellyally]

Didn't they just report a few weeks ago an 8 or 9 billion profit for first half of the year? (Profit to me means over and above all expenses, being maintenance, paying loans on expansion projects, diesel bills, salaries etc etc) So, where does that profit go? I would think something like eskom should be non profit, every cent should go directly back into it, expanding etc... have I missed something here when they make statements like 'no money for diesel' etc?

 

[Arthur]

Yes, where is good old Toematt-Pietersen? Most useless Minister ever (and that is saying something!). She completed screwed up the Fisheries department.

Arthur...I think you have too much faith in Eskom. Acting as if all the employees are hard-working. Sure some are, but some aren't pulling their weight - like in any organisation. I'd really like to know how you could justify the huge bonuses to the SENIOR people in the organisation...surely one of their KPIs is you know...keeping the lights on?

I certainly don't think the deployed cadres and those who weedled their way in under the false flag of AA should get bonuses. They are leeches, and their presence in Eskom in my view amounts to something very close to sabotage.

But there are thousands of very hardworking people breaking their backs to prop up systems (not just baseload stations, but substations, telecommunications systems, logistics and supply systems, etc, etc) despite the bumbling by those non-professionals that have been imposed on them. It is those hardworking professionals, workers, and ornery Eskommers that I really sympathise with.

You can just imagine how awkward it is for them in ordinary social settings. Everyone hates them and their employer, and so they maar sheepishly go along with it because to try to explain the Big Picture is just too difficult, and besides, how many really have visibility of way the **** rolls downhill - they just see things not working. You need to be an experienced manager with deep understanding of large organisations and to see the wood for the trees...and SA has less and less of those.

There are many competent senior people in Eskom, often sidelined or given half-an-ear because of political interference driven by State policy. We need to do all we can to retain them.

The only solution is to get the State out of Eskom, and Eskom out of the State. And that also means the insane AA policies that are imposed on Eskom and destroying it before our eyes.

After the last fiasco, the State even agreed to get in an experienced manager from the private sector to fix things. He left in disgust not even two years later, not because the organisation was unfixable, but because the political bosses would not allow him to do what was needed to fix things. He often spoke glowingly of the many, many superb professionals inside Eskom.

It is a national tragedy in slow motion.

 

[Sneeky]

Didn't they just report a few weeks ago an 8 or 9 billion profit for first half of the year? (Profit to me means over and above all expenses, being maintenance, paying loans on expansion projects, diesel bills, salaries etc etc) So, where does that profit go? I would think something like eskom should be non profit, every cent should go directly back into it, expanding etc... have I missed something here when they make statements like 'no money for diesel' etc?

Profit means nothing.

Take that 8-9 billion, its just 9 months worth of running the diesel gennies. (which have been running pretty much constantly for ages. Even if Eskom had no profit government would pay for the diesel, but then there is no diesel, like just recently.
Factor into it power taken out of the grid for maintenance, and say a silo falling down reducing a power plant to a 3rd of what it could do and you are up the creek without a paddle.

The point is even with the diesel gennies running adding 2000mw to the grid there is zero spare capacity for peak demands, like cold weather or unanticipated maintenance at some or other plant. No margin for error or more importantly growth.

The ANC made a conscious decision (patently wrong) and now we are all living with it.
Investment and economic growth stymied completely as a result.

They should all be hanged, drawn and quartered for this fiasco. It has set our countries development and goals back decades!


from 2007 article

Mbeki admitted last month his government should have heeded pleas by Eskom several years ago to invest more in electricity generation to keep up with the country's economic growth.

"When Eskom said to the government: 'We think we must invest more in terms of electricity generation', we said no, but all you will be doing is just to build excess capacity," he said in a speech.

"We said not now, later. We were wrong. Eskom was right. We were wrong."

Eskom provided power requirement projections every year looking well forward. They were indeed proved to be accurate.
They were saying, there's a bullet train coming right at us and we are standing on the tracks, lets move, the ANC said no!

A classic case of people in power with the inability to grasp a clear picture presented to them and even if they did grasp it, their project management or the people deployed to do that failed abysmally.

 

[Arthur]

Besides, if Eskom doesn't produce a surplus (profit), how on earth will it fund expansion?

Not to make a surplus would be immensely irresponsible. For most of its existence as perhaps the cheapest electricity producer on earth Eskom made a surplus. Until 2002 Eskom's surplus never ended up in the hands of the State, but was used to fund growth, expansion, refurbishment, etc.

What happens now to Eskom's profit is another question, of course.

 

[MickeyD]

Besides, if Eskom doesn't produce a surplus (profit), how on earth will it fund expansion?

Not to make a surplus would be immensely irresponsible. For most of its existence as perhaps the cheapest electricity producer on earth Eskom made a surplus. Until 2002 Eskom's surplus never ended up in the hands of the State, but was used to fund growth, expansion, refurbishment, etc.

What happens now to Eskom's profit is another question, of course.

Need to check their Free Cash Flow status for a better picture.

 

[Sneeky]

Yes, the Board are now appointed by the sole shareholder, ie the State, represented by the Minister of Public Enterprises. That only happened from 2002 when the State nationalised Eskom.

That is the mechanism the State has used to bring a once magnificent organisation to its knees.

Can you remember Alec (missing bolt sabotage at Koeberg) Erwin, lobbying for the ali smelter at Coega.
Potentially the single biggest investment opportunity in South Africa at the time (maybe even still now).

Now smelters are arguably one of the single biggest consumers of electricity. Erwin was adamant there was no reason for concern. this was from around 2002, in 2006 he was still adamant the project will move ahead as they were finalizing the electricity contracts.
Alcan saw the writing on the wall then and bailed.
In 2006-2007, country wide rolling blackouts, go figure.
another good story to tell

 

[Bona Botse]

This thread has been quite enlightening, thanks for sharing the info.

 

[kingrob]

Apology accepted, now fix it please.

+1

 

[Sonic2k]

v
There are tens of thousands of highly committed and competent people at Eskom, who do an incredible job with aging plant and infrastructure.

WRONG... there are a handful of people who know what they are doing and I personally know two of them... they are being worked literally to death to solve insurmountable problems and the brain donors in charge don't understand and spin Zooma a new yarn every day

 

[frailwings]

WRONG... there are a handful of people who know what they are doing and I personally know two of them... they are being worked literally to death to solve insurmountable problems and the brain donors in charge don't understand and spin Zooma a new yarn every day

To expand on this, a lot of people are saying that the government is to blame, and that the employees at Eskom are competent, and while there probably are a lot of smart and competent people at Eskom there is an issue with their employment and BEE policies on an employee level.

I went to University with a black woman, who dropped out of the University course (BIng) and switched to the ND/BTech - nothing wrong with that, but my point is she was unable to keep up on the BIng. I looked up some people from University the other day, we are just under ten years in now working.

She ended up working at Eskom and was quickly moved into management, after 5 years she was the GM of the Mpumalanga operating Unit. Many other black people who studied with me ended up at Eskom too, and other state companies. All of them were either chief engineers or senior managers, or executives.

They are being set up to fail, instead of getting actual training and years of engineering experience behind them, they are moved into management and have no idea what they are doing, evidenced by the multitude of issues.

 

[Sinbad]

The shareholder calls the shots at the end of the day...

 

[midnightcaller]

By getting rid of the cANCer's BEE candidates, and appointing the CORRECT people.

Okay. So are you saying that BEE candidates are INCORRECT people?

 

[RyanPCMR]

I don't buy it!

 

[Debeer165]

Okay. So are you saying that BEE candidates are INCORRECT people?

Are.... Are you trolling?

 

[backstreetboy]

Fsck them. Tltl. We are shedding till 10pm.

 

[Splinter]

To expand on this, a lot of people are saying that the government is to blame, and that the employees at Eskom are competent, and while there probably are a lot of smart and competent people at Eskom there is an issue with their employment and BEE policies on an employee level.

I went to University with a black woman, who dropped out of the University course (BIng) and switched to the ND/BTech - nothing wrong with that, but my point is she was unable to keep up on the BIng. I looked up some people from University the other day, we are just under ten years in now working.

She ended up working at Eskom and was quickly moved into management, after 5 years she was the GM of the Mpumalanga operating Unit. Many other black people who studied with me ended up at Eskom too, and other state companies. All of them were either chief engineers or senior managers, or executives.

They are being set up to fail, instead of getting actual training and years of engineering experience behind them, they are moved into management and have no idea what they are doing, evidenced by the multitude of issues.

They are not "being set up to fail". They have just been promoted due to government philosophy (yes, as has been said before, the ANC are in control of Eskom). Of course, the difference here being that inexperience and incompetence is reflected in real and measurable terms in how our grid is failing.

Any other department, you can blame accusations on racism.

 

[Arthur]

WRONG... there are a handful of people who know what they are doing and I personally know two of them... they are being worked literally to death to solve insurmountable problems and the brain donors in charge don't understand and spin Zooma a new yarn every day

I hear you, Koosi. But it's a helluva lot more than a handful. You can't run the massive systems at Eskom for more than a month with only a handful of competents. But a bunch of incompetents in critical top- and second-tier line management positions can ruin it for everyone. That is the problem at Eskom, and it was imposed on Eskom by the ruling party. A poorly skilled or incapable lower-level worker is one symptom of a management problem.

Of course I recognize that Eskom is how infested with incompetents. But we should also recognise that there are still many smart and capable people there. If there weren't, the entire system would have collapsed years ago.

Let's hope that this current crisis doesn't so demoralize them that they end up leaving anyway. If they did we'd really be up the creek without a paddle.

 

[Splinter]

Besides, if Eskom doesn't produce a surplus (profit), how on earth will it fund expansion?

Not to make a surplus would be immensely irresponsible. For most of its existence as perhaps the cheapest electricity producer on earth Eskom made a surplus. Until 2002 Eskom's surplus never ended up in the hands of the State, but was used to fund growth, expansion, refurbishment, etc.

What happens now to Eskom's profit is another question, of course.

"Profit" is an accounting/business term. And in fact, Eskom has been making billions of profit for years, according to released information. The problem is that that profit has not been spent properly on upgrading and maintaining infrastructure. The ANC seems to have instructed the management to keep the lights on at all costs; no matter that this will make the lights go out for a very long time afterwards.