Eskom was once one of the world’s leading power producers and by the end of 1990 it supplied more than half the electricity in Africa.
What is particularly impressive was Eskom’s efficiency. In its 1994 annual report, it promoted the fact that it was the world’s lowest-cost producer of electricity.
Fast-forward 25 years and Eskom is a shadow of its former self. It is unable to keep the lights on and South Africans are now paying more than ever for this unstable electricity supply.
It is also battling with widespread corruption and mismanagement, a bloated workforce, and an ageing power generation fleet which has not been properly maintained.
Corruption is so rampant at the company that the Special Investigating Unit (SIU) had to refer 5,500 Eskom officials for disciplinary proceedings for dishonest dealings.
Eskom and the SIU are also trying to recover R3.8 billion from former Eskom executives, former board members, the Gupta family, and their associates.
Eskom said the funds were lost in a concerted effort to corruptly divert financial resources from the company.
Arrests have also been made in relation to unlawful payments that were traced to Eskom officials pointed to evidence of fraud, money laundering, and corruption.
Turning Eskom around
To turn Eskom around is a mammoth task considering the culture of poor performance and corruption at the company.
Speaking to The Money Show’s Bruce Whitfield, energy analyst Chris Yelland said there has been a lack of accountability at Eskom up to the highest levels.
This, he said, can partly be blamed on the structure of Eskom which only has one shareholder – the state.
Since the state is playing with taxpayers’ money – hence not their own money – accountability for poor performance is lacking.
It is, however, changing under new Eskom CEO Andre de Ruyter, who is now acting against poor-performing executives.
Yelland said this is long overdue, as it is essential to drive a culture of excellence for an organization to succeed.
“Eskom used to be known as an excellent state-owned enterprise – very different from many of the other SOEs,” he said.
However, over the last decade, the culture at Eskom changed radically where mediocrity and outright bad performance was tolerated.
“De Ruyter is now driving a new culture of accountability and excellence and he has to be applauded for this,” said Yelland.