Dysfunctional management behind Eskom collapse – German experts

Eskom’s management system is dysfunctional and too complex for the utility to even maintain or improve the performance of its power station fleet and tackle load-shedding. 

This is feedback from the German consultancy group vgbe energy, which the National Treasury commissioned to recommend how Eskom can improve its performance and identify the key issues at the utility. 

The consultancy group published an extensive report outlining Eskom’s severe problems they identified over the four and a half months they spent examining the utility. 

The first issue identified by the group of German engineers who have vast experience in operating coal-fired power stations was Eskom’s overly complex management system.

“Most of the issues relating to the low Energy Availability Factor (EAF) can be attributed to a single root cause,” the report said. 

“The management system with its governance, structure and processes is dysfunctional and too complex.”

Eskom has too many organisational layers and unclear decision-making processes. This generates a tremendous amount of red tape and a lack of accountability, they said. 

“Eskom’s generation fleet has been trapped within this complex management system for so long that it is no longer able to maintain or improve the technical performance of the coal-fired plants.” 

The main problem with such a complex management system is that it has been unable to implement the solutions to the utility’s problems, which are well known. 

Simply put, operation and maintenance must be improved and conducted according to industry standards, the report said. 

However, “in many cases, the decision-making is delegated to committees, of which there are too many at all levels of the hierarchy.” 

The report suggested that Eskom cut red tape and reduce the complexity of its management structure. 

In particular, the German consultancy recommended giving more authority to plant managers who have more intimate knowledge of the coal-fired stations than management at Megawatt Park. 

Plant managers also have to follow complex procedures, making them unable to manage day-to-day operations and maintenance challenges in an efficient way. 

The plant management has to follow complex procedures and is therefore unable to manage day-to-day operations and maintenance challenges in a timely

and effective manner.


Top JSE indices