South Africa

Andre de Ruyter under fire

Many high-profile commentators have slated former Eskom CEO Andre de Ruyter for his poor performance at the power utility.

De Ruyter made headlines in recent weeks for his explosive ENCA interview and leaving Eskom shortly afterwards.

In the interview with Annika Larsen, De Ruyter revealed widespread corruption at Eskom involving high-level cabinet members.

He added that the power utility is a feeding trough for the ANC and criticised the party’s outdated communist ideologies.

He also lifted the lid on organised criminal cartels linked to politicians stealing around R1 billion per month from the power utility.

Commenting on his performance, De Ruyter said he failed in the readily measurable objectives, including load-shedding. “That is the elephant in the room,” he said.

On the positive side, he said he successfully defined a strategy, which is now irrevocably set, in starting Eskom’s just energy transition.

He also claimed credit for addressing key issues regarding Eskom’s balance sheet and improving Eskom’s income statement.

“Governance is much improved. Eskom is better from a compliance point of view, and we are committed to unbundling and restructuring.”

Not everyone is convinced that De Ruyter performed as well as he claimed, especially since load-shedding deteriorated hugely under his tenure as CEO.

SARS commissioner Edward Kieswetter

SARS commissioner Edward Kieswetter said that when an organisation does well, the CEO is, often undeservedly, credited. When things don’t go well, they should face the music.

“It is unfortunate that the Eskom CEO, in his final days, began to say things which he could have said earlier. It leaves a bad taste in the mouth,” he said.

Kieswetter said Eskom’s management should focus on its 48,000MW of installed coal generation capacity instead of only looking at renewables.

“Of course, you need a just transition, but we will not be able to build enough solar and wind to replace the 32,000MW demand we need every day,” he said.

“The new leadership of Eskom has to make the power plants work. We have seen a decline in plant performance (EAF), and the leadership of Eskom has to take accountability.”

He said focusing on a just energy transition could have made De Ruyter biased towards renewables and more accepting towards Eskom’s deteriorating coal power plant performance.

“As South Africans, we must expect a better performance of Eskom’s current installed capacity,” Kieswetter said.

“To argue that the power stations are old and will underperform does not explain the 47% energy availability factor for Kusile, which is a new power station.”

Bronwyn Nielsen

Seasoned financial journalist Bronwyn Nielsen said she did not buy “Andre de Ruyter is a hero nonsense”.

“He should have never been appointed to run Eskom. Did anyone actually check his credentials?” Nielsen asked.

“Look no further than the value destruction at Nampak under his leadership. Now trying to play the white knight card. Ridiculous.”

She added that Eskom is a basket case, with corruption running deep and many pigs gathering at the trough.

“But de Ruyter is less hero and more ego – something along the lines of “let me ride this wave of sympathy and fame to secure my next South African top job,” she said.

The chart below shows the Nampak share price during De Ruyter’s tenure as CEO.

Eskom board chairman Mpho Makwana said De Ruyter behaved reprehensibly, adding that he hadn’t discussed most of his allegations with the board.

Makwana said De Ruyter had direct access to him, public enterprises minister Pravin Gordhan, and other roleplayers.

“He has played to the gallery in a public interview when he has not tabled any of those matters before the Eskom board,” Makwana said.

The Eskom chair added that 90% of what De Ruyter shared in the interview was the first time they heard it. “What he did was totally reprehensible and unacceptable,” Makwana said.

He added that the board was also not happy with De Ruyter’s performance and that the former Eskom CEO was not fulfilling his key duties.

A date was set to look at De Ruyter’s performance. However, Makwana said he “skilfully” avoided the planned performance review by resigning shortly before it took place.

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