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A month after Cyril Ramaphosa took the helm of the ANC in December, he convened an urgent meeting with then-President Jacob Zuma and ministers to save the company from the crisis. Eskom State.
Ramaphosa understood that radical changes were necessary. utility company.
He persuaded Zuma to replace Eskom's board of directors and appoint a new chief executive to appease investors such as the World Bank, according to a meeting official
. determination to reform Eskom, a company that is approaching breaking point after a series of corruption scandals over the nine years of its tenure
Eskom is critical for South Africa. It provides more than 90% of the country's power, has 20 billion Rands of state-guaranteed debt and is often cited as a threat to the credit ratings of South Africa, which are almost empty of charity
be a disaster for generations to come, "said the official, who declined to be named.
"Ramaphosa explained to Zuma that it was time to act."
Ramaphosa is still facing a battle that keeps Eskom afloat: new frauds under the company's previous leadership are still being discovered, a lethargic economy But what can help Ramaphosa is an awareness in the echelons ANC senior officials that Eskom is no longer untouchable, sources said within the ruling party
. President in February, Ramaphosa pursued the reform, surprising many with the speed with which he tackles the problems of Eskom that have accumulated for years.
Ramaphosa appointed former finance minister Pravin Gordhan to guide the recovery efforts. Produce a plan to stabilize the company's finances and end a Zuma-backed nuclear deal that could have forced Eskom into billions of extra dollars of debt.
Khusela Diko, spokesman for Ramaphosa, said the president was meeting regularly with Gordhan to discuss Eskom and that redesigning the company was a priority.
A spokesman for Zuma was not available to comment
. ] No other option
Eskom also employs 47,000 people and has powerful unions, some ANC allies and other more militant, who have said that they However, according to ANC sources, Ramaphosa has obtained the support of senior leaders of the ruling party for a radical reshaping of Eskom, which will involve attracting more and more people. more private investment in the electricity supply sector.
From an ideological point of view, Eskom represents a real challenge for the ANC, said a source close to Ramaphosa.
"Greater private sector participation is not appropriate for some in the party, but there is no other choice. "
The official involved in the meeting with Zuma, who holds a senior position at the ANC, said discussion took place on badets that should be considered "non-essential" and sold
It will take five to ten years to properly restructure Eskom Ramaphosa will need a war room to repair rot [19659002] Ronald Chauke
The idea that outside investors may be needed to save the company is a dramatic change for a political party that has rejected any form of privatization of Eskom for years.
The desire for change is partly motivated by the realization that Eskom is more fragile than many thought. The situation worsened in November when the World Bank held a series of meetings with senior officials.
Eskom had less than R10 billion, commercial banks had suspended loans, and officials feared the World Bank would do the same. KhOLD Phasiwe, spokesman for Eskom, said the World Bank has expressed concern over progress made on a specific project during a meeting with Eskom leaders and also raised the issue. the question of governance. One of the top officials of the World Bank said that Eskom, which borrowed $ 3 billion from the bank for projects including the Medupi coal and renewable energy plant, n & # 39; He had not failed in his engagements. Bank loans and the lender were not threatening to suspend the loans
New Dusk
While the commercial banks resumed their loans when Zuma resigned and the Lastly, Ramaphosa faced other challenges Eskom.
Workers went on strike in June, forcing the utility to turn off power for three days for the first time since 2015 As South Africans curled around candles, commentators joked about the promise of Ramaphosa to usher in a "New Dawn" after a decade of stagnation become a "New Twilight".
Eskom proposed a wage freeze because of financial constraints, even though inflation is around 5%. Unions held for an increase of at least 15% in an increasingly acrimonious conflict.
Ramaphosa used his close ties with South Africa's largest trade union federation Congress of South African Trade Unions (Cosatu) to make progress. by the unions as an unusual gesture, Gordhan intervened personally.
Pravin Gordhan. Photo: Denzil Maregele
Gordhan summoned Cosatu to a meeting last month and promised that Eskom would rethink his refusal to raise salaries, laying the groundwork for an agreement of about 7% that is being flattened
"It was unprecedented that Minister Gordhan met us to resolve the conflict," said Sdumo Dlamini, president of Cosatu, which has more than 10,000 members in Eskom through its affiliate of the National Union of Minors (NUM). "The talks were constructive, and we agreed to meet again to discuss Eskom."
Ramaphosa previously held a senior position in NUM and Cosatu supported his bid to become ANC leader. Although Ramaphosa's willingness to repair Eskom does not seem doubtful, most badysts believe that it will take time.
"After the maladministration and corruption under the previous leadership, the new board is a step in the right direction," said Ronald Chauke, portfolio manager of energy at the Undoing Tax Abuse organization from South Africa.
"But it will take five to ten years to restructure Eskom properly." Ramaphosa will need a war room to repair the rot. "
Some unions and some conservative sections of the ANC s & # 39, vehemently oppose attempts to sell Eskom parties, fearing to give up control of parts of the power grid.Its ideological point of view, Eskom represents a real challenge for the company. ANC
Source ANC
The National Union of Metalworkers of South Africa (Numsa), a militant group with several thousand Eskom workers, called for a meeting with Gordhan, Finance Minister Nhlanhla Nene and other unions to discuss Eskom
"We are vigilant about the restructuring projects of state-owned companies, as this usually results in losses of money. jobs, "said the secretary general of Numsa
"We reject the privatization of Eskom with the contempt it deserves."
Analysts say that any reduction in the heavy work force of Eskom is likely to be delayed after the national elections next year, where high unemployment will be a burning issue. But Ramaphosa, who played a key role in the talks to end the white minority's dominance more than twenty years ago, has a reputation for moving forward in difficult negotiations.
Ramaphosa could also reduce Eskom's debt without incurring the wrath of opponents of privatization by converting the debt held by the Public Investment Corporation (PIC), which invests the pension funds of the employees of the government, in equity, badysts.
The state-held PIC held more than R80 billion of Eskom's debt last year. Ramaphosa will not make swift progress with the radical restructuring needed to shore up Eskom's balance sheet, as it balances competing interests in the ANC before the election, "said Darias Jonker, director of Afri ca at Eurasia Group
"But it will finally happen."
