It’s absurd to blame De Ruyter for Eskom’s failure

Andrew Kenny argues that what ruined Eskom was the failure to build power stations in the 1990s, destructive racial policies such as affirmative action, BEE, cadre deployment, employment equity and transformation, awful planning, bad choice of power station design, over-manning, shoddy workmanship and gross incompetence; and finally massive corruption, eventually resulting in outright crime and sabotage. It had nothing to do with Mantashe’s mad claim that Eskom (ie De Ruyter) was ‘actively agitating to overthrow the state.’ Simply put: De Ruyter was not allowed to touch many of these issues, and so was unable to fix Eskom. The article below first appeared on the Daily Friend – Sandra Laurence


De Ruyter was not allowed to fix Eskom

By Andrew Kenny

When André de Ruyter resigned as the CEO of Eskom last week, the EFF expressed the thinking of our political class. In an official statement, dated 14 December 2022, entitled ‘De Ruyter’s resignation long overdue’, the EFF declared that the ‘Eskom CEO is incompetent, arrogant and useless and he was never qualified to be appointed to position.’

The EFF then told us how to solve South Africa’s electricity disaster. ‘The EFF further calls for the suspension of all loadshedding with immediate effect and the restoration of electricity to all households and business premises.’

There you are! To solve our electricity problems, all you have to do is don a red uniform, wave a magic wand, brandish an automatic rifle, and command Heaven to end all loadshedding – ‘with immediate effect!’ – and it shall be done.

The EFF is very much part of our ruling elite. The scary thing about it is that its beliefs and policies are no different from many in the ANC, the SACP, the unions and the RET. When it was announced in 2019 that De Ruyter was to be the new Eskom CEO, the EFF declared the appointment ‘racist’.

The leaders of the EFF feel that it is not racist for them to choose white teachers for their children, but it is racist for Eskom to choose white executives for its management. Many leaders of the ANC and the SACP feel the same. The EFF described De Ruyter and Pravin Gordhan, the Public Enterprises Minister, as part of ‘the Indian and white supremacists who are crippling our national assets’.

The resignation of André de Ruyter is sad and disturbing. He seems a decent, honourable and able man, with good experience as an industrial manager. His main fault was that he was awfully naïve about the extent of the ruin and corruption at Eskom, and about the powers the ANC would allow him to solve its problems. These powers were limited.

The ANC would not allow him to address deep, structural problems at Eskom. Essentially his brief was: ‘We order you to fix Eskom provided that you do not fix Eskom.’ It took him a long time to realise this and, when he finally did, Eskom was in Stage 6 loadshedding and was hostage to ferocious faction fighting within the ANC, culminating in the frenzy of its conference this week.

De Ruyter’s separate fault was his idiotic belief that we should invest a lot of money in ‘renewable’ energy (solar and wind), which has proved a ruinously expensive failure everywhere. Perhaps this is why he backed away from refurbishing the old coal stations.

Failure

Given the disgusting attacks on him from ruling politicians, and the failure of the government and the Eskom board to support him, De Ruyter had little choice but to resign. The worst attack on him came from a surprising source, Minerals and Energy Minister Gwede Mantashe.

Mantashe has been the most sensible voice in government on our electricity supply. He has emphasised the need for ‘baseload electricity’ (reliable electricity all the time), which solar and wind can never provide. He has said we need to be sensible about reducing our dependence on coal, which served us well in the past and which we have in abundance. But recently, in a demented outburst, he said: ‘By not attending to loadshedding Eskom is actively agitating to overthrow the state.’

It was assumed, surely rightly, that he was referring to De Ruyter, and essentially accusing him of treason. President Ramaphosa did not come to De Ruyter’s defence (although Pravin Gordhan did). He also accused De Ruyter of acting like a ‘policeman’ who ‘focused’ on ‘chasing criminals’.

Here is what has ruined Eskom: failure to build power stations in the 1990s, destructive racial policies such as affirmative action, BEE, cadre deployment, employment equity and transformation, awful planning, bad choice of power station design, over-manning, shoddy workmanship and gross incompetence, and finally massive corruption, eventually resulting in outright crime and sabotage. De Ruyter was not allowed to touch many of these issues, and so was unable to fix Eskom.

Because of failure to build power stations, South Africa ran out of electricity in 2007. A schoolboy, drawing a simple graph, could have predicted this in 1994. It caused devastating and permanent damage to our economy. The existing power stations were run into the ground in their effort to meet even the reduced demand. Maintenance was neglected. Incompetent operators and maintenance staff caused further damage to our stations, which began falling apart. Accidents and breakdowns increased. It got worse as the years went on.

The Energy Availability Factor, which gives the percentage of power units available for generation, went down and down. It was going down before De Ruyter took over and, as expected, went further down during his tenure. It is absurd to blame him for this.

Here is the only way to solve our electricity problem. It will take time – ten years or more. The first thing is to fix the existing Eskom fleet. This means spending large amounts of money on maintenance and improving operation, which means employing only competent staff, regardless of race or party affiliation. The total staff complement needs to be cut by about 50%. Eskom, which produces about 90% of its electricity from coal, needs to procure the best, cheapest, most reliable, least environmentally damaging coal possible. This means scrapping BEE coal procurement, which is probably the single biggest cause of Eskom’s debt, and which has caused great damage to Eskom’s power stations and to the environment of Mpumalanga. Corruption and crime at Eskom need to be rooted out.

Best technology

In the long term, we shall only have the electricity supply necessary for a prosperous economy if we build many new power stations. By far the best technology for this is nuclear. Wherever nuclear has been deployed with good management and political support in a sustained programme, it has proved to be the cleanest, safest, most reliable energy source and always affordable.

Koeberg, despite recent blunders, has provided our cheapest electricity for 38 years. Solar and wind are useless for grid electricity and no more should be procured. In the short term, we should get electricity wherever we can, provided it is reliable and that it costs us less than the cost of ‘unserved’ electricity (electricity that fails to be delivered), which is estimated to be about 7,500 cents/R/kWh.

If diesel costs less than that – and it does cost far less than that – we should buy all the diesel we need. Similarly, power ships running on imported liquid natural gas should be considered. If we can get gas from anywhere, we should burn it to make electricity.

Unfortunately, De Ruyter was allowed to do few of the things necessary to fix Eskom. He was not allowed to scrap affirmative action and make appointments on merit. He was not allowed to reduce costs and improve power station performance by getting rid of BEE procurement. President Ramaphosa himself is adamant about this: he strongly supports BEE.

When ANC municipalities procure shoddy goods and services from BEE companies, and when their water supply fails and sewage runs in the streets where poor black people live, Ramaphosa still supports BEE. He is insistent that Eskom must buy very expensive, very bad coal from BEE suppliers. The fact that this coal ruins power stations and the environment doesn’t matter. All that matters is that some rich, politically connected BEE coal owners become even richer. Enriching a few wealthy blacks at the expense of many poor blacks is, after all, the aim of BEE and transformation.

Legal BEE joins naturally into illegal BEE. Legal BEE insists that any company investing in a mine in South Africa must hand over 30% of its value to politically connected comrades or local chiefs supporting the ANC. The next logical step is for the construction Mafia, posing as ‘local business forums’, to murder any investor who doesn’t hand another 30% over to them. Similarly, legal BEE coal procurement flows naturally into coal theft, where criminals steal coal in trucks headed for Eskom and replace it with rocks. Apparently, this has become a booming business.

When De Ruyter tried to stop this sort of thing, he was accused by Mantashe of acting like a policeman. I suppose he should have looked the other way. ANC corruption and organised crime are becoming increasingly difficult to separate, as Jacque Pauw explains in detail in his new book, Our Poisoned Land. It seems that ANC politicians will attack anybody who tries to root it out.

EFF is delighted

There have been loud celebrations over De Ruyter’s resignation. The EFF is delighted. NUMSA was ‘overjoyed’. Cosatu welcomed his resignation. Matshela Koko, a previous acting CEO at Eskom, facing charges of fraud and corruption, was pleased at De Ruyter’s resignation and now expects loadshedding to end in six to twelve months. (Where have I heard this before?)

If the best possible steps were taken, South Africa could have a good, affordable, reliable electricity supply in rather more than ten years’ time. Unfortunately, it seems unlikely that they will be taken. The De Ruyter episode confirms the gloomy prognosis.

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  • Andrew Kenny is a writer, an engineer and a classical liberal
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