First sip: Sabotage: Eskom under siege by Kyle Cowan

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Like a good beverage, a good book holds promise from the first sip. This extract is used with the permission of Penguin Publishers.

About the author

Photograph: Penguin Random House SA

Kyle Cowan is an award-winning journalist. He was twice named joint winner of the prestigious Taco Kuiper Award for investigative journalism and works at News24 as part of their in-depth investigative team.

About the book

Sabotage: Eskom under siege
Kyle Cowan

Publisher: Penguin Random House
ISBN: 9781776390595

Inside the assault on South Africa’s power grid ...

After unknown saboteurs toppled a strategic pylon near Lethabo Power Station in the Free State in November 2021, almost causing the country to plunge into stage 6 load shedding, Eskom’s chief executive officer, André de Ruyter, declared: "This was clearly now an act of sabotage and I think we can call it as such."

Who was behind this, and what is their ultimate goal?

Since his appointment in January 2020, De Ruyter has faced intense opposition from within the power utility as he attempts to clean up corruption and return the electricity company to a semblance of its former glory. He is not alone. Chief operating officer Jan Oberholzer and other trusted allies in Eskom have also come under intense fire.

From forensic investigations and botched probes to accusations of racism, De Ruyter and Oberholzer have spent significant amounts of time fending off allegation after allegation. Amid this onslaught, it has become clear that their enemies will take any measures necessary to have them removed from office.

Based on exclusive interviews with De Ruyter, Oberholzer and other key figures, Sabotage: Eskom under Siege is a story of conspiracy and subterfuge at South Africa’s ailing power utility, uncovering the power struggles that threaten the country’s very survival.

First sip

Towards the end of February 2021, Eskom finally suspended Solly Tshitangano for poor performance and for issues around Econ Oil and instituted disciplinary proceedings. Among the charges were his failure to timeously handle the internal processes to review Econ’s position as a supplier, his role in awarding further contracts to Econ despite his knowledge of the alleged impropriety around the company’s interactions with senior Eskom officials, and his breaching of confidentiality policies.

A week later, Parliament’s public finance watchdog, SCOPA, pounced on the allegations made by Tshitangano, particularly the inference that black-owned supplier Econ Oil was being treated differently from white-owned companies. On 3 March, SCOPA came out swinging, publicly announcing that it would launch a probe into the allegations of racism against De Ruyter. Tshitangano had laid the groundwork for this latest assault on the Eskom CEO by copying SCOPA in on his letters to Gordhan and the Presidency, which also ensured they were made sufficiently public.

On 15 March, SCOPA asked De Ruyter to respond to Tshitangano’s allegations. In what appears to be a characteristic response, he hit back hard in a signed affidavit submitted to the committee at the end of March.

‘The accusations and subsequent energy spent on dealing with them have seriously undermined my ability to properly and efficiently conduct my duties,’ he wrote. ‘In effect, a simple and straightforward operational issue dealing with underperformance has been elevated to Parliamentary level. This kind of spurious and defamatory accusation does not justify the enormous time and resources wasted in dealing with it. It seriously undermines morale in Eskom, as we seek to engender a high-performance culture. It obstructs the efforts made by all concerned to recover Eskom’s productive efficiency. In addition, it constitutes a very serious imposition on me personally which distracts very significantly from my primary task of turning Eskom around.’

Eskom decided to establish its own inquiry. On 9 March, it announced its intention to appoint an independent senior counsel to conduct a comprehensive investigation into Tshitangano’s allegations. Advocate Ishmael Semenya was duly appointed on 1 April. A week later, at Gordhan’s urging, SCOPA announced its decision to halt its inquiry to allow Eskom time to complete its own probe.

In the meantime, Tshitangano’s internal disciplinary hearing took place. On 28 May, panel chair Advocate Nazeer Cassim recommended the CPO’s immediate dismissal, having found that he had acted intentionally to further the interests of Econ Oil. ‘Matters which should have been dealt with internally were externalised for an ulterior purpose,’ Cassim remarked, in a reference to Tshitangano’s letters to Gordhan, the president and SCOPA. He also determined that the accusations of racism levelled against De Ruyter were a clear attempt ‘to divert attention’ away from Tshitangano’s ‘own wrongdoing’. The issue, Cassim found, ‘had nothing to do with race’.

In his trademark style, Cassim eviscerated Tshitangano’s conduct: ‘He made serious disparaging allegations based upon racial content and thereby injured the dignity of De Ruyter … he did not testify before me to deal with this. It is clear the relationship between him and De Ruyter is irretrievably destroyed and the trust relationship between him and Eskom is irretrievably destroyed … Tshitangano acted dishonourably and has exhibited all the qualities that makes [sic] him unsuitable for the position he occupies. He declined the opportunity to deal frankly with serious allegations of misconduct and which impacts on the employment relationship.’

Cassim was also scathing of the Eskom board and SCOPA, and found that Tshitangano had placed Econ’s interests above Eskom’s.

‘The CPO was also given an audience by SCOPA,’ he noted. ‘Whether this was orally or by way of written representation is unclear to me, but again the theme is to discredit De Ruyter on racial grounds and the typical South African excuse when a person in the capacity of the CPO is confronted with wrongdoing, namely to play the race card. Race has nothing to do with this matter. This matter is about dishonesty and corruption. It is about competence and the kind of society we wish to live in and future generations to succeed or fail. It is a sad reflection of this country that we are so fragile that we cannot rid ourselves of subjective inadequacies in dealing with issues of efficiency and performance. The issue in this matter is the interests of Eskom and to permit the CPO to use racial overtones to undermine a proper investigation into the contracts awarded to Econ Oil and his own conduct demonstrates weakness on the part of the board of Eskom.’

On receiving Cassim’s findings, Eskom served Tshitangano with a letter of dismissal.

‘Cassim’s finding was not based on facts placed before him in the disciplinary, but his opinion,’ Tshitangano told me in a written response.

The following week, on 1 June, Semenya handed over his report, in which he stated that Tshitangano had to be threatened with misconduct charges before he agreed to appear for an interview, only to then, in a singularly bizarre twist, deny that he had ever accused De Ruyter of racism.

‘Where in the letter do I say André is a racist?’ an excerpt from the interview transcript reads, quoting Tshitangano.

‘I must state in the most emphatic of terms that this retraction by [Tshitangano] is startling,’ Semenya noted in his report. ‘As a senior executive member of Eskom, he is alive to the fact that these complaints had enjoyed wide publicity, he wrote to the president of the Republic of South Africa, the minister of Public Enterprises, the director general of the department of public enterprises, the Auditor General, SCOPA, the Zondo Commission and to the National Treasury. Any simple Google search for “purging black suppliers” reveals names of [De Ruyter] referencing him as a racist. It also records complaints by organisations such as the Black Management Forum, calling for the suspension of [De Ruyter]. As a senior executive at Eskom, the CPO must have known the nature of these allegations, given the history of South Africa, would impair the dignity of the GCE, malign the entire board of Eskom and imperil the corporate standing of Eskom, which is the biggest state-owned company. The allegations could potentially harm Eskom’s financial status.’

Tshitangano, Semenya said, never publicly denied the allegations despite knowing they were ‘wrong, egregious, false, baseless and lacking any substantiation … It is not surprising that the GCE would take umbrage at these scurrilous allegations; that the Chairperson of the board would take offence that he is cast as somebody presiding over a corporate entity that is accused of practising racial discrimination which, according to the CPO is promoting a “culture where corruption, nepotism and patronage are tolerated”.’

On the question of racism, and given South Africa’s history, Semenya described testimony by Eskom chairperson Professor Makgoba as follows: ‘His evidence was that many of us may struggle to define what a lion is, but we will all know if it entered the room we occupy.’

In response to a question about why he never publicly corrected the narrative around his allegation against De Ruyter, Tshitangano told me he had reiterated to Semenya that De Ruyter was ‘not consistent when treating suppliers’. ‘My letters gave examples which show that De Ruyter was inconsistent in applying the rule of law. Semenya’s report is based on evidence that was presented to him during the hearing. You must get the transcribed record in order to understand what transpired during the hearing.’7

He said Semenya ignored his evidence in two respects: Tshitangano believed section 195 of the Constitution was applicable to Eskom, but Semenya disagreed and recorded his dissent in his report. Tshitangano also said that he told Semenya the board never ratified the appointment of Werner Mouton, the fuel expert De Ruyter had brought in to evaluate the fuel oil tender, but that Semenya recorded in his report that Tshitangano conceded that the issue was moot because the board had ratified the appointment.

‘It is not clear why you are not challenging Semenya’s omission and factual inaccuracies,’ Tshitangano said to me. ‘Semenya refused to deal with the cancellation of the Econ Oil contract and other issues I have raised during the hearing which were not included in the terms of reference … It is not a belief but a fact that De Ruyter applied the rule of law inconsistently. De Ruyter stated publicly that ABB will not be suspended from the supplier database.’

This is correct. But the reason, which Tshitangano apparently refused to accept, was because ABB’s systems are an integral part of Eskom’s power stations. They cannot be ripped out and replaced without massive cost and lengthy shutdowns. The company is also fully cooperating with investigations.

In support of his allegation that De Ruyter was treating a black-owned supplier differently, Tshitangano had pointed in his letters to Gordhan to an instance when De Ruyter questioned him over why he had not made himself available for a November 2020 meeting of the supplier review committee, which was due to discuss Econ’s continued status as an Eskom supplier. Tshitangano argued this was a breach of governance, as the CEO was undermining him. He also complained that De Ruyter’s instruction to limit transactions of R10 million or more, or with a life of longer than six months to require divisional board approvals, was further violation of policy and governance.

But De Ruyter was simply protecting Eskom amid a looming restructuring of the company – he had been tipped off that there was a sudden flurry of long-term contract placements, purportedly designed to survive the restructure.

‘On whether the GCE’s instruction of 31 August 2020 constitutes a breach of Eskom’s delegation of authority of July 2020 or that it is an unlawful suspension of the board’s power, the answer is, no,’ wrote Semenya. ‘It would be perplexing that a GCE, whose compact with the Board and responsibility is to manage the day-to-day operations of the business can be unable to give such an instruction. It is surprising that the CPO, as a senior executive at Eskom, would find it necessary to raise this instruction as unlawful and address the president of the country. He should know better.’

In conclusion, Semenya wrote: ‘Having heard all the evidence, and considered all the documents, I could find no substantiation for the allegation that the GCE has conducted himself in any manner that would amount to racist practice.’ He similarly found no evidence of De Ruyter’s or Eskom’s alleged poor governance, or that any recruitment processes were irregular, or procurement practices unlawful.

De Ruyter’s response to SCOPA, coupled with the Cassim and Semenya reports, must have been enough to satisfy the parliamentary committee, because it apparently never raised the spectre of its own investigation again.

‘In Nampak I had this saying, if you are white and you are useless, I will fire you. If you are black and you are useless, I will fire you. So, the common denominator is, don’t be useless,’ De Ruyter told me in 2022.8 He said this attitude resonated particularly with young black professionals, who all rose to the challenge.

‘I think that one of the negative consequences of affirmative action has been that we have tiptoed around this issue of performance. And it does a disservice to ambitious, competent, professional, intelligent hard-working black people, who want to be rewarded for who they are and what they do,’ he noted. ‘I have to say in Eskom, we had a board meeting, a distribution board meeting. And again, fuck it, particularly young black women. Fuck it, they are good. They are smart, they are clever, they are competent, you ask them a stinker of a question, and they [snaps fingers] have the answer. And I ask, have you thought of this? Ja, we have and we have done x, y and z. And I sit there, and I think thank goodness. And that gives me a lot of confidence.’

By all appearances, Tshitangano had been part of a devious plot to rid Eskom of De Ruyter, and by extension Jan Oberholzer, while protecting politically exposed suppliers. He claims that he is innocent and had acted out of genuine concern. He also maintains that he is a whistleblower, and that it was as a result of his delay in executing the Econ Oil contract that De Ruyter acted against Econ Oil – paving the way for the High Court to set aside the award. Econ was subsequently denied leave to appeal by the Supreme Court of Appeal. It remains only for the arbitration proceedings – and criminal investigations – to be finalised.

What Tshitangano apparently had not counted on was his adversaries’ resolve to fight for what was right in the face of his allegations against them. It cost him his job.

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