Eskom embraces BEE and transformation – despite serious problems

Eskom issued a media statement saying it embraces all government policies to transform the South African economy to deal with inequality and socioeconomic imbalances.

It followed Eskom board member Mteto Nyati’s views that empowerment rules hamper Eskom’s performance.

He told the Sunday Times that 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.

Nyati’s view is substantiated by feedback from Eskom insiders, who said BEE, affirmative action, corruption, and restrictive procurement policies are behind many problems.

They said Eskom’s aggressive affirmative action and transformation policies prevent good staff members from being promoted to positions that will benefit the company.

Eskom is also forced to use suppliers that struggle to deliver equipment for maintenance. The procurement policies also significantly increase the price of products and services.

Eskom backs transformation policies

Eskom responded to Nyati’s comments, saying it embraced the preferential procurement policy framework act (PPPFA) as a state-owned enterprise.

It also supported “all government policies aimed at transforming the South African economy to deal with the pervasive conditions of inequality and socioeconomic imbalances”.

“The Eskom Board fully comprehends these imperatives and is totally cognisant of the challenges many South Africans continue to face in terms of playing meaningful roles and livelihoods in the mainstream of the economy,” it said.

“When Eskom engages global players and contractors, due cognisance is always taken to facilitate local beneficiation and the empowerment of South Africans.”

Eskom said it focuses on benefitting black women and the youth, who continue to be the most marginalised members of our society.

“As the Eskom leadership collective, we place a high premium on our role as a catalyst for transformation and empowerment,” Eskom chairman Mpho Makwana said.

In the financial year ended March 2022, Eskom procured more than R134 billion worth of goods and services from B-BBBEE-compliant suppliers in South Africa.

It represents approximately 76% of Eskom’s total measured procurement spend on all contracts last year.

It is significantly higher than the 64.5% total measured procurement spent on black-empowered suppliers in 2021.

“Procurement spend on black-owned and black youth-owned suppliers rose to 47.1% in 2022, from 34.6% the previous year,” Eskom said.