How this South African billionaire says he would fix Eskom

South African billionaire Rob Hersov says that the national power utility Eskom is run by a mafia, and massive changes are needed to get the lights back on.

The country has been plunged into record rolling blackouts, with load shedding becoming a norm. Over the weekend (2 October), Eskom, which supplies 90% of the power used in South Africa, said that stage 3 would continue for the coming week following failures at important generating units.

Speaking to SABC News, Hersov – a private investor and founder and chairman of Invest Africa – said that to fix the energy problem in South Africa and, more specifically, Eskom itself, the government needs to:

• Keep someone like current CEO Andre De Ruyter at the helm of the company;
• Replace the board with people who understand energy;
• Bring in someone fresh who can ‘deal with the mafia’.

Every single element of Eskom, including its cable and diesel management, has a mafia involved, and they are stealing and breaking the company, said Hersov.

He said that this had been approved and facilitated by the ANC through cadre deployment, adding that the ruling national party’s incompetency could be seen with Pravin Gordhan, the minister of state-owned entities, realising ten years too late that Eskom needs a change of board.

On 30 September, the national power utility was granted a new board – some of which have technical skills.

Mpho Makwana has been appointed chairman of the board and has served on a number of other boards, including as a non-executive chairman of ArcelorMittal South Africa. Several of the new appointees have technical backgrounds, including Clive Le Roux, Eskom’s chief nuclear officer, and Lwazi Gogwana, an engineer with 25 years worth of experience.

According to Eskom, Rod Crompton, who served on the previous board, will retain his post, as will chief executive officer Andre de Ruyter and chief financial officer Calib Cassim.

Eskom has been struggling with instances of sabotage and crime for years, showing little sign of slowing down. In August, the Sunday Times reported that the ‘coal mafia’ are hijacking vital coal supplies destined for Eskom power stations.

Such criminal syndicates are exporting the coal at ten times the price that Eskom pays as the war in Ukraine drives up global demand.

A former operative in the coal mafia said that the scale of the operations is wide. “One night, almost 2,000 tonnes of RB1 (high-grade) coal was dropped off. You can do the sums. To give you an idea, 2,000 tonnes fills 65 trucks.”

The bigger energy picture

As a country with large reserves of coal, Hersov said that South Africa must not be guilty of using it and has no reason to abide by what is regarded as best practice overseas by countries that have already used coal.

“We should go back to fossil fuel and become energy independent,” he said. However, South Africa needs to add nuclear and gas.

“We have incredible amounts of uranium in the country, and we could be a leader in small modular uranium reactors that are safe and produce 50MWs each,” said Hersov. This needs to be done by the private sector, he said.

On gas, the billionaire said that given the country’s large reserves of shale gas in the Karroo, it should return to fracking. He said it had been done safely and cost-effectively in places such as Canada, and the same should be done here.

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