Molefe back at the helm of Eskom

Brian Molefe, reinstated Eskom CEO

“Public enterprises minister Lynne Brown’s motivation in support of the Eskom board decision to take Molefe back for the remaining two and a half years of his term is completely unacceptable. The board’s recommendation hinges on the premise that it will be a lot cheaper to reappoint Molefe than having to pay him R30m,” says Andre Venter of trade union, Uasa.

After the State of Capture report was tabled by former public protector Thuli Madonsela, it was inter alia revealed that Molefe had exchanged some 58 calls with Atul Gupta. Molefe denied any impropriety and made his infamous comment about the Saxonwold shebeen at a dramatic press conference on national television, where he tearfully announced his resignation from Eskom ‘in the interest of good corporate governance’. His position at Eskom was advertised in newspapers with the closing date of 20 March.”\

The union says that from a pure legal perspective, Molefe withdrew from his contract unilaterally, thereby forfeiting all rights and benefits to which he may have been entitled, including pension provisions.

Questions of credibility

While Professor Raymond Parsons of the North West University School of Business & Governance, says this raises questions of credibility around the previous commitments to good governance and sound financing of SOEs like Eskom, given the particular circumstances which led to Molefe's voluntary but understandable departure from that organisation a few months ago.

“This development also more broadly creates a negative perception at a time when South Africa is keen to avoid another credit downgrade, and where the margin for error has shrunk,” he says.

“From a macro-economic point of view, Eskom has been a focal point of controversy around a range of key issues for the economy. These include nuclear power, electricity tariffs and controversial tenders, as well as credit rating agency concerns about governance at Eskom and its dependence on Treasury guarantees.

The power utility was also downgraded by rating agencies, and therefore needs to rebuild confidence in its decision-making, policies and operations. “It is clear that his reappointment has elicited strong negative reaction at several levels, including from the ANC itself. In view of the widespread criticism that has emerged and in the interests of maintaining public confidence, it is now necessary for the relevant Parliamentary Standing Committee to critically interrogate the Eskom board as soon as possible on this unexpected decision and decide on the way forward,” he says.