Genuine politics in the energy sector – lessons from Eskom

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By Eng. Geoffrey Chishimba Chiyumbe

Political parties in South Africa, from the ruling party to the opposition have overwhelmingly welcomed the resignation of Eskom’s chair and affirms the move as a show of credibility, responsibility and accountability.

I know myself with absolutely no inch of doubt at all, that I am a very wise man because of what God has endowed inside of me which is unmatchable. God has given each one of us talents, according to our abilities. That being the case and having established that fact, there are a number of principles that have governed my life on this journey of meandering through it. One of them is this one, “A smart man makes a mistake, learns from it, and never makes that mistake again. But a wise man finds a smart man and learns from him how to avoid the mistake altogether.”

We have a crippled energy sector in Zambia today which has been in a state of emergency for some months now though lately we are getting a temporary sigh of relief with the coming on line of Mamba collieries plant and offloading 300MW into the national grid. The challenges are well known and experts have provided tangible solutions to our government on what to do to dig ourselves out of this calamity called load shedding, which has forcefully been lurking on our door steps without our formal invitation to it, and almost claiming membership into our family unit and which, if not properly tamed, may eventually claim citizenship in Zambia. As much as we don’t accept what has caused it to visit our homes and businesses, we will struggle to permanently chase it away from our midst.

So what events have transpired lately in the energy sector in South Africa for us to at least pretend to be wise and learn something from the smart people of Mzansi?

In South Africa the board chairman of Eskom has tendered in his resignation to the ANC government. Jabu Mabuza resigned when he acknowledged that Eskom failed to honor its commitment to the highest office in the country to avoid load shedding until 13 January 2020.

Eskom has also lately been going down and consequently crippling the South African economy. State capture, mismanagement, corruption and gross abuse of authority amongst others have been cited as the factors leading to that downward spiral. Of interest to note is that Eskom has in the recent past undergone many tariff upward adjustments with the hope that it would enhance and uplift the financial status of the ailing power firm. Tariff increases unfortunately never produced the anticipated positive outcome because the system had too many leaking holes that needed to be sealed first. The leaking holes were created by vices committed during the presidency of Jacob Zuma , who immediately after leaving office, has been implicated in so many corruption scandals, majority of which, including state capture, involve his close friends, the Gupta family.

And so following that resignation, political parties from both the ruling and opposition reacted positively to the resignation of Eskom chair Jabu Mabuza, calling the decision a show of accountability; although one opposition party believes he should not be the last to resign if Eskom is to be fixed.

A statement from the ruling African National Congress lauded Mabuza’s resignation as a demonstration of accountability and responsibility by a parastatal executive tasked with fiduciary duty to institutions of state in the public interest. The ANC statement said the country’s state-owned enterprises would continue to be drivers of socioeconomic development and must be given the capacity to fulfill their critical developmental role.

“In the resolutions we noted that firm action is required to improve the governance and performance of SOE’s by ensuring the appointment of skilled staff and qualified board members, and to protect them from improper interference,” the statement said.

The opposition party, the Economic Freedom Fighters was a lot more critical of those responsible for the financial and operational recovery of Eskom, saying that Mabuza’s head should not be the last to roll before Eskom is saved. “The EFF welcomes the resignation of Eskom Chair Jabu Mabuza and calls on Minister of Public Enterprises Pravin Gordhan to follow suit. Mabuza’s resignation at the power utility is long overdue. He has demonstrated complete incompetence and absolute ignorance about energy and Eskom in general,” the EFF statement said. The EFF statement accused Gordhan of demonstrating “empty arrogance” and putting state assets in a dire state in an attempt to justify their privatization.

How is our situation today in Zambia? Tariffs have just been increased, a move that has driven the majority Zambian households into abject poverty, with many wondering if this PF government really cares for them. On the other side of the divide we see the PF government getting excited and assuring Zambians that load shedding is coming to an end soon come mid 2020, and with increased tariffs now in effect, Zesco will be an efficient and emerge as a viable power entity to reckon with in the region.

As many energy experts have always been saying and said time and again, the challenges in the energy sector are enormous and not isolated and as such they call for a structured and comprehensive reforms to restore it to sanity. One isolated activity can never suddenly result in Zesco becoming an efficient and profit making power utility. The sector has leakages that need to be sealed.

The ensuing sudden increase in confidence by the PF government has lifted them and taken them to a higher dimension of operation where they have now even decided to temper with the power supply to the sensitive copperbelt province based mining companies. The government is surprisingly very confident and have announced that they are not going to renew the Bulk Supply Agreement ( BSA) that has been running for the past 20 years between Zesco and the Copperbelt Energy Corporation (CEC). The existing transmission network infrastructure currently into the copperbelt is owned by CEC. This means that for Zesco to deliver their power from their generating power stations located in the southern part of Zambia, they cannot avoid using the CEC infrastructure. The inefficiencies currently at Zesco are not just financial in nature but also organizational, technical and operational. This means therefore that even if government decides to increase tariffs even beyond cost reflectivity, Zesco will still have to work on its organizational, technical and operational challenges for it to attain the level which is globally accepted for a viable power entity in terms of performance benchmarks. Zesco doesn’t know how much it incurs to render a service to it’s clients and so, in the absence of that empirical figure from the cost of service study, it would be naïve for anyone to say we have now attained price parity. Zesco for now only relies on what the Independent Power Producers ( IPP’s) are offering as a negotiated rate.

The Zesco scenario in its current state is analogous to pouring tap water into an empty container that has many big holes at its bottom or base, and hoping to fill it up. Wisdom dictates that the restoration process is to first seal the leaking holes as a first activity. The leaking holes have already been identified by a team of industry experts who already did a thorough diagnostic review, and include amongst others poor governance and management structure; political interference; technical and operational challenges as well as its current poor financial status, which has rendered it technically Insolvent; and Its uncreditworthiness which has made the power entity difficult or impossible to access funds for Investments into its aged infrastructure. Allegations of gross political interference by the PF government to the extent that they have turned it into the PF cash cow are so loud that only an inquiry into such would settle the matter. Government has not acted upon the recommendations from the team of experts, or has it? Are these measures the PF government is taking today like the CEC situation, in resonance with the aspirations of the 7th national development plan which envisages increased private sector participation in the energy sector?

Reasons and answers to these are only known by the energy cluster minister, who is a lieutenant to President Edgar Lungu. It is important for government to listen to the advice from the technocrats on how best to run this institution so that eventually it may also start declaring dividends to the government. Steve Jobs famously said, “It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.” Leadership means we must be willing to check our pride and arrogance at the door if leading change and success are the ultimate goals. Failure to act leads to failure. No wonder political pundits recommend that to be successful, a leader must surround himself with credible lieutenants.

What has recently happened in South Africa makes me shudder when I try to imagine why in this country we can’t be honest with ourselves but prefer to continue lying to ourselves, and at the same time hoping to move this nation forward to higher levels of productivity. We have suffocated the energy sector and we need to give it oxygen to bring it to life. This government has introduced a culture of intimidation such that technocrats have been made to be purveyors of falsehoods against common sense just to advance the personal will of the politician, at the expense of mother Zambia’s development. Technocrats have often found themselves in a precarious and compromised situation where we are reprimanded, threatened with loss of scarce employment and forced by our political superiors, to retract statements we earlier made in earnest that, though factual, didn’t sit well with the politician. We cannot continue to live a lie. After all this is a Christian nation where truth must be upheld in high esteem. Unfortunately what we are always bombarded with are total and fabricated falsehoods. Who bewitched us ? While politicians in South African accept responsibility, here in Zambia we unfortunately blame everything on climate change. It is not easy to fix a problem that you haven’t identified.

As I conclude please allow me to draw parallels between Zambia and South Africa so we all learn something moving forward. The level of seriousness any government in power attaches in fighting load shedding determines the failure or success thereof. It can be deliberate to either continue with the plundering or putting measures in place to arrest, stop and seal the leakages that have been enabling the plunder.

Since the coming in of President Ramaphosa. people are now witnessing the implementation of recommendations aimed at restoring normalcy in Eskom. The results are there for all to see. Before Ramaphosa came into power, that is during the Zuma presidency. it was not common to mention or hear such terms as state capture and corruption for fear of reprisals from the Zuma administration.

Findings of the commission of inquiry and subsequent lifestyle audits, established beyond any reasonable doubt that the vices were actually committed under the nose of Jacob Zuma during his reign.

The lessons learnt? Firstly, if implementing expert recommendations to resuscitate an inefficient entity will not advantage a corrupt government, such will be shelved, closed case. Secondly, in a democratic dispensation, it takes a determined new government to undo the evils committed by the previous corrupt regime. Thirdly, the opposition parties must never relent in their quest to help bring and restore sanity to the energy sector by always providing checks and balances to the government in power, as they decode and expose falsehoods emanating from the party in power, for the good of the general citizenry. Fourthly, resign to pave way. It is a credible path. Fifthly, It matters how the government in power bows out when citizens decide to retire it and bring in a new government to move the nation forward. Will it bow out In shame like the case was with Jacob Zuma or in dignity? Better is the end of the matter than its beginning.

The bible says if you know how to do something right and then you refuse or fail to do it then you have committed a sin. Sin brings failure and sin offends God. God detaches himself where there is sin. Righteousness is what guarantees victory and success.

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Start: 2019-07-01 End: 2019-07-31