Why Eskom is collapsing

Solidarity CEO Dirk Hermann said there are two main reasons for Eskom’s collapse – corruption and race-based policies.

In 2022, South Africans endured the worst load-shedding the country has ever seen. Hours of power outages per day are now commonplace.

Load-shedding is also the main reason for South Africa’s stunted economic growth, resulting in high unemployment and poverty levels.

Eskom CEO André de Ruyter promised that load-shedding would be significantly reduced from September 2021 because of their extensive maintenance program. It did not happen.

Load-shedding continues to get worse, and neither Eskom nor the government has a coherent plan to address the electricity shortage.

Commenting on the situation, Hermann said there are two main reasons for power outages:

  • Corruption and greed have seen criminals steal the power utility dry under the guise of black economic empowerment (BEE).
  • Race-based policies like affirmative action have destroyed institutional knowledge and skills at Eskom.

Hermann highlighted that corruption and the obsession with race are still prevalent at Eskom and continue to harm the company.

Dirk Hermann, Solidarity CEO

Other high-profile leaders share Hermann’s view and have asked the government to address these challenges.

Eskom board member and former Altron CEO Mteto Nyati warned that empowerment rules hamper Eskom’s performance.

Nyati said these rules would have to go if there was any chance of ending South Africa’s deepening electricity crisis.

“Internal corruption is largely at the back of empowerment policies that promote local small businesses,” Nyati said.

He added that affirmative action is hampering Eskom’s ability to employ skilled people who can fix the company.

“Right now, we need to be focusing on who is the best person for the job because those are the ones who should be fixing what needs to be fixed, regardless of how they look,” he said.

Mteto Nyati, Eskom board member

Eskom generation executive Rhulani Mathebula said Eskom’s biggest problem is fraud and corruption.

Mathebula said the impact of fraud and corruption is felt throughout the company and undermines any effort by the great engineers and other staff at Eskom.

The problems include people stealing coal and diesel, damaging plants to get maintenance contracts, and delivering the wrong spares and equipment.

Because of corruption and fraud, there are significant delays in awarding contracts and “shady service providers” whom do very poor work are employed.

“Fraud and corruption are the biggest enemies of progress at Eskom. It is the most important issue to fix Eskom to get the maintenance program back on track,” Mathebula said.


This article was first published by Daily Investor and is republished with permission.

Now read: FNB and Mediclinic preparing for total Eskom grid collapse — even if it is unlikely

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Why Eskom is collapsing