Former Eskom boss blames the president for power utility’s inability to keep the lights on, the inquiry into state capture heard.
FORMER Eskom chief executive Brian Molefe on Friday tore into President Cyril Ramaphosa’s business dealings with the power utility and effectively accused him of being responsible for load shedding.
Molefe told the commission of inquiry into state capture that Ramaphosa was brought into the fold by mining giant Glencore when it bought Optimum Coal Mine (OCM) because it wanted a political heavyweight.
“They sold 9.64% to Ramaphosa, a political heavyweight, made him chair of the new company,” Molefe said.
He testified that this was a strategic decision to use Mineral Resources and Energy Minister and ANC national chairperson Gwede Mantashe, who was ANC secretary-general at the time and former National Union of Mineworkers general secretary.
“They knew the profitability of the company could only come from the successful renegotiation of the price. Ramaphosa was their bet,” Molefe said.
According to Molefe, the profitability of OCM was dependant on the peddling of political influence and the extent to which Glencore would be able to exert pressure on Eskom directors and not the fundamentals of the company it had acquired.
He maintained that this was a source of Glencore’s problems and that they had made their bed and needed to lie on it.
“It was unfair, arrogant, for them to demand that Eskom should pay for the irresponsible manner they had tied themselves on the proverbial knot,” Molefe explained.
Glencore, Molefe said, demanded that Eskom increase the price of coal per ton from R150 to R530, which would mean a transfer of R6 billion from Eskom to the company over three years.
He said Eskom would have paid an amount of R8bn, including the writing off of R2bn in penalties that Glencore wanted from the power utility for its (Glencore’s) failure to conduct a due diligence exercise before buying OCM.
“What was happening was wrong on all fronts. It was going to financially ruin Eskom,” said Molefe, adding that this would have led to the poor and most vulnerable subsidising the dealings of the rich.
He continued: “There was no way that I could with a clean conscience attend public gatherings and meetings and shout from the rooftops that Soweto residents needed to pay their debt to Eskom when I was allowing international corporates to disadvantage Eskom on many fronts.”
Molefe believed the payments to Glencore would have sunk Eskom and that he could not allow R8bn to be unjustly transferred to the company.
He also testified that Eskom had a de facto board established outside the company in the form of a war room in the Presidency and that its management had to report to this structure.
Ramaphosa, who was deputy president at the time, headed the war room and was the de facto chairperson of the Eskom board as well as and that the ANC leader had started playing this role from being OCM chairperson, according to Molefe.
“I suspect there may have been some conflict,” he said about Ramaphosa’s role in the war room.
Molefe added that Ramaphosa was made OCM chairperson in 2012 when he was given or bought shares in the company.
“The war room demanded meetings with management and department of public enterprises officials every Friday. They had to submit reports for the war room,” he said.
Molefe said members of the legitimate, legal board were not seeing those reports.
He said Eskom management gave unending and meaningless reports to the war room.
“I was uncomfortable with the war room, and stopped attending its meetings,” Molefe said.
To his relief, Molefe explained, former president Jacob Zuma shut down the war room and gave Eskom management a fair chance at ending load shedding.
“I found the behaviour of Glencore and Ramaphosa to be revolting,” he said.
Molefe made further claims.
“We defeated load shedding on August 8, 2015, and we never had load shedding again for three years after I left,” said Molefe, who was Eskom boss between 2015 and 2016.
He said load shedding returned after the ANC’s December 2017 national conference in Nasrec, Johannesburg, at which Ramaphosa was elected party leader and later the country’s president in 2018.
Molefe’s evidence continues.