Eskom’s Chairman Steps Down Despite South African Power Crisis

Eskom’s Chairman Steps Down Despite South African Power Crisis

Zola Tsotsi will leave his post as chairman of Eskom Holdings SOC Ltd., the state utility that’s struggling to keep South Africa supplied with power, after a dispute over the suspension of four managers including the chief executive officer.

“Eskom can focus on the challenges facing it and sets the company on a new path to regain the confidence of all stakeholders concerned in ensuring the important work of meeting the energy needs of the country,” the Johannesburg-based company, which supplies about 95 percent of South Africa’s power, said in an e-mailed statement on Tuesday.

Tsotsi’s departure follows the suspension of CEO Tshediso Matona and executives, including the finance director, on March 12. Standard & Poor’s lowered Eskom’s rating to junk this month after Tsotsi announced the suspensions and started a probe into the state of the business, including under-performance of generation plants, delays in starting up new facilities, high costs and cash-flow problems.

“It’s such a mess I’m skeptical this opportunity will be used as an offramp from the crisis,” said Peter Attard Montalto, a London-based economist at Nomura International Plc, said in an e-mailed response to questions.

Tsotsi has been chairman of Eskom since 2011. Matona took office in September after former CEO Brian Dames stepped down in March last year. The personnel shifts have added to the utility’s operational and financial issues.

Eskom implemented almost daily rolling blackouts in February as it struggled to provide stable supplies because of technical faults that led to emergency repairs.

The utility is also struggling to plug a 225 billion-rand ($19 billion) funding gap as it faces unanticipated costs including about 1 billion rand a month in diesel to run turbines normally used only for peak demand hours at the same time as building new power plants.
Ben Ngubane has been appointed acting chairman, Eskom said.

Source: Bloomberg


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