EDITORIAL | Eskom requires certainty and momentum as Nyati’s departure nears

After posting another set of stellar results , Eskom is entering a period of leadership uncertainty ― the renewable term of office of its chair, Mteto Nyati, comes to an end next month.

On the margins of the recent results presentation session, Nyati was sanguine about what lies ahead: he was ready to move on but also willing, if asked, to continue serving his country.

As a director of a state-owned enterprise (SOE), his continued tenure at the helm of the power utility is a function of different variables.

If he is nominated by his line minister, the so-called shareholder representative, his name has to be endorsed by the rest of the cabinet.

But before his name gets into cabinet memos, Luthuli House, which runs an informal yet influential parallel recruitment of SOE executives, might weigh in depending on its opaque assessment of Nyati.

Importantly, however, electricity minister Kgosientsho Ramokgopa appears to relish working with Nyati and the Eskom team.

The triumvirate ― CEO Dan Marokane, Nyati and Ramokgopa ― are credited with having turned Eskom around , ending load-shedding, limiting load reduction, returning into profitability and beginning a complex restructuring.

When the trio took over the helm of Eskom, it was debt-ridden and struggling to keep the lights on. The energy availability factor was languishing around 50%, and by August it had recovered to about 70%.

Nyati, who spent much of his professional life in the private sector, has shown another rare ability: a skill to provide a political umbrella to his executives.

Before the separation of electricity and energy from mineral resources and energy, he had to shield his team from turf wars among politicians, including the now defunct public enterprises department.

The simplification of reporting lines ― making SOEs report to line departments instead of dual departments ― made his job easier, but it didn’t entirely remove politics.

As well as ending load-shedding, a major priority, Nyati helped steer Eskom to undertake a complex restructuring . The easy part has been to legally separate Eskom’s three divisions ― generation, distribution and transmission ― into subsidiaries under a holdings company of which he is chair.

Under his watch Eskom has appointed CEOs of these entities. The tricky part lies ahead.

Legally separating transmission from the holdings company is simpler on paper. However, ensuring that the integrity of Eskom ’s balance sheet is maintained is not that straightforward.