12 October 2017

South Africa: New Eskom Boss Keen to Perform His Duties

Eskom's new interim Group Chief Executive Sean Maritz has asked for space and time to focus on executing his duties as mandated by the power utility's board with the support of Public Enterprises Minister Lynne Brown.

In a statement on Thursday, Maritz said the executive management team remains focused on its five priority initiatives, namely: increasing demand for electricity; reducing primary energy costs; implementing advance analytics to deliver savings; releasing government guarantees; and ensuring the completion of the new build programme.

"Globally, the electricity landscape is changing rapidly. Eskom is not immune to this change and we are facing threats on multiple fronts: within the South African electricity market, and within the broader global energy context. With a wave of change in customer, supplier and competitor behaviour, we are facing a constrained electricity sales path," he said.

Maritz, who was appointed to the top post last Friday, said the potential sources of revenue growth range from those that are close to the utility's capabilities to those that are entirely new.

"By exploiting both regulated and unregulated opportunities, we have an opportunity to deliver significant revenue impact. We will do this by unlocking opportunities, focusing on local demand stimulation, cross-border sales and unregulated opportunities.

"A clear distinction exists between the business of today and the Eskom of tomorrow, necessitating a focused and structured approach, which will ensure the right level of focus and drive for each identified opportunity," he said.

Regarding media reports that he had hired a friend and fellow church member without declaring their friendship, the group chief executive acknowledged the oversight, but refuted suggestions that the awarding of the contract was irregular.

He said the awarding of the contract was adjudicated upon by a panel as per Eskom's internal processes.

He further refuted claims that he had deleted some information from the server, adding that the IT security system was built in such a way that no email could be deleted.

His six months written warning in relation to the conflict of interest expired in 2010, and has been duly expunged.

In announcing his appointment, the Eskom Board said it has decided to rotate the current executives for this role to "ensure exposure". Previously, Maritz was the utility's Chief Information Officer (CIO) and Group Executive for Information Technology.

McKinsey matter

On the issue of McKinsey's statement with relations to pay back the fees paid to it, the power utility said it had noted the matter.

"Eskom has noted the statements made by McKinsey in relation to paying back the fees paid to it in 2016. Eskom's lawyers are handling the matter, and will in due course advise on the way forward," it said.

Last week, Eskom announced that it would be taking action to recover funds that were paid to McKinsey and Trillian.

In a statement on Thursday, the power utility said it has written to the two companies explaining the action it would take. Eskom requested their cooperation in the matter.

"Eskom sought McKinsey and Trillian's cooperation in respectively returning R1 billion and R564 million, which appears to have been unlawfully paid out in 2016 and 2017.

"The interim findings from Eskom investigations, into the circumstances surrounding payments made to both companies, point to certain decisions by Eskom, and resultant payments, as being unlawful," it said at the time.

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