Ramaphosa’s ESKOM Task-Team confirms an illegal due diligence exercise to ensure an Eskom privatization!

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Noam Chomsky once said: “That’s the standard technique of privatization: defund, make sure things don’t work, people get angry, you hand it over to private capital.”  We in a season where these words of Chomsky appear unfolding right before our eyes if developments around Eskom as energy powerhouse becomes the subject of discussion. Dare we assert what is at play at Eskom this very moment immanent in the illegal formation of the so-called Eskom Task Team is a ruse to legitimise the deceitful handing of Eskom over to privateers at fraction of its true value through a brutal mechanism of Business Rescue proceedings.

 

Following a fresh stint of load-shedding on a national scale when we thought that era was history, caretaker president Ramaphosa on December 13, announced his appointment of a Task Team to look and advise on Eskom challenges. This is in a sense unprecedented given the fact that a new board was appointed hardly 11 months ago by Minister of Enterprises Pravin Gordhan. Back then we heard how this administration was seeking to clean up in getting rid of SOE boards and management teams since these according to Gordhan constituted the festering spots for state capture practices.

Back then we heard a buoyant Ramaphosa announced a new board at Eskom on January 21, directing it to appoint a permanent chief executive officer (CEO) and chief financial officer (CFO) within the next three months. Ramaphosa at the time said the new board was part of his intervention which he said will restore Eskom as an important contributor to the economy. The board which comprises Jabu Mabuza, Sifiso Dabengwa among others were held up as the solution for a struggling Eskom.

Fast forward to December 13, 2018, we learnt President Cyril Ramaphosa has appointed an Eskom Sustainability Task Team to advise the government on actions to resolve Eskom’s operational, structural and financial challenges. The terms of reference for the Task Team include among others:

  • Assess the operational, structural and financial viability of Eskom, including key assumptions around the life of plant, impact and cost of environmental commitments and demand assumptions.
  • Review the turnaround strategy submitted by the Eskom Board of Directors. This will include a review of key assumptions, impact on tariffs and industry, and viability of proposed solutions on the future role of Eskom.
  • Assess the appropriateness of the current Eskom business model and structure.
  • Present a view on the current energy trends and the evolution of the global energy context.
  • Present a view on the role, positioning and structure of energy utilities and provide proposals.
  • Propose alternative business and financial models appropriate for the South African context.
  • Propose how the structure of the electricity industry in South Africa can adapt to evolving changes in this sector, including the harnessing of new technologies.
  • Make proposals to resolve the debt burden. All the above in a normal circumstance falls within the ambit of the Board.

Henry Kissinger reminded us: “Control oil (‘energy/electricity’) and you control nations; Control food and you control the people”. It becomes increasingly difficult to deny that this seems to be the chosen route of the backers of SA’s caretaker president; to control this nation through the control of Eskom.

 

Is the art of deflection hard at play here?  At first glance, we all will be fooled to assume that Ramaphosa’s Task Team is the clearest sign of a lack of confidence. While most assumed the appointment of the Task Team suggested and indicated a strained relationship between Ramaphosa and Gordhan, as minister of public enterprises, we are fooled to assume such. Neither is the appointment of the Task Team a confirmation of any lack of confidence in the existing Board appointed by Ramaphosa through Gordhan. On the contrary, the Board of Eskom is doing exactly what it was mandated that is to work for the preparation of the sale of Eskom by means of destroying the entity. The board is made up of very clever business role players.

Looking closer to the terms of reference of the Task Team an interesting set of aspects unfold. The terms of reference mirror that of a due diligence exercise in preparation of a sale. If we remember correctly back in 2015 already Ramaphosa as deputy president leading the “war room” made overtures to have an Eskom privatized and sold. The appointment of this board in January is the extension of that same plan.

 

The challenge with the Task Team lays in its illegality. Eskom as a business operates under companies act and laws. It goes without saying that if any task team be appointed it has to come by the facilitation of a provision in the law that Ramaphosa could use to give effect to his intention of a Task Team.  Ramaphosa is yet to tell us on what law provision he depended when he determined the establishment of the said Task Team. Those who know say there is no such provision rendering the Task team an illegal entity in that sense.

On another score why would the Eskom Board bat no eyelid to raise their concerns that they have to avail confidential company information to a task team that came about less in the provision of laws compliant with the company laws? It should have been that the Board raised the red flag on this and showed its independence to at all times act in the interest of Eskom.

The other challenge with the Task Team it is claimed emanates from some of the names that make up the Task Team. Of the names listed, it can be confirmed that there are those who have received colossal amounts of investment mandates from international interest to secure acquisitions in energy spheres. Among those who are on the recently announced Task team is Brian Dames former Eskom CEO and now active in the arena of alternate energy. The Task team members are therefore hardly independent but deeply vested in a privatised Eskom.

In the words of Thomas Jefferson: “When injustice is made law, resistance is duty” – A more legitimate question therefore which remains unanswered is; What exactly is constraining the tens of thousands of Eskom employees who are on the verge of losing their jobs and livelihoods from contributing to a legal fund through a attorney’s trust account in order to vehemently fight off this sinister plot to hand Eskom over to the privateers? Equally puzzling, why exactly is Economic Freedom Fighters (EFF), National Union of Metalworkers of South Africa (NUMSA) and National Union of Mineworkers (NUM) all resorting to issuing of hollow media statements and marching instead of mobilising the electorate and workers to dutifully resist the impending tyranny? The question we must ask of Eskom employees is why their truculence to join the established trust fund set up to fight what we have just sketched.

 

We may therefore not look at the recent load-shedding as purely accidental but necessarily an orchestrated intervention to support the sentiment that Eskom has reached a place of free-fall and warrants remodelling. The means for such argument will be found in the economy of using the Gupta name. We asked what kind of load shedding this was during summer when major industries are shutting down for an annual almost month-long festive season?

What then would be the means by which Eskom will be privatized? It appears the plan or vehicle for such privatisation is and remains the business rescue route model. This method is useful for its inherent benefits. One of such benefits is the fact that once a business goes in rescue the ordinary rules do not apply. It becomes a very simple means to justify the lay-offs (25000) Eskom already warned of. The rules to get rid of so many people in a normal setting are very complicated and often more than cumbersome, yet once a company is in business rescue firing staff is not as complicated.

It is now established case law that business rescue proceedings cannot be reversed even by a court of law. The Business Rescue Practitioner will hold absolute power and discretion to sell the assets and the actual business of the company to any party they deem appropriate at whatever price.

It is common cause that in 2015, Anton Eberhard and Martin Kingston hatched a plan to privatize Eskom through a business rescue and then Chairman of the “Eskom War-room” Cyril Ramaphosa is said to have welcomed the idea. It is a fact that these same persons are hard at work together with the Minister of Public Enterprises and Eskom Board to implement business rescue proceedings for Eskom between now and the end of January 2019. This will in effect remove any impediments on the Business Rescue Practitioner to fire between 20,000 to 25,000 employees without following the provisions of LRA.

On the other hand, the Eskom board, therefore, appears complicit with the intention to bring Eskom to a place of dysfunctionality which assisted by the Task Team due diligence readies it for an imminent sale,

It appears more than speculation that Eskom is being set up for privatization in which the targeted spoils already has allocated names and families who stand to benefit. Eskom must, therefore, be seen to appear to be staggering on its knees to avail the opportunity for the lurking vultures to make some good pickings as Eskom is forced to sell its assets long eyed by a combination of overseas and local interested ones. These assets may end up being sold for not even a tenth of its true worth.

When Ramaphosa resorts to Task Teams some will make the claim that he is looking for answers because he can’t find them from those currently entrusted with the responsibility to steer Eskom to the advanced success. Well, that is misleading, because that is exactly what the engineers of the Eskom demise and privatization wants the general public to think and believe.

Shall we remind ourselves again what Ramaphosa at the time of the appointment of the new Eskom board said? He among others said the new board was part of his intervention that will restore Eskom as an important contributor to the economy. We just are not sure if he committed then it will stay as the Eskom we have come to know or newly privatised entities that are claimed to be important contributors to the economy where many of the role players be it, board members, politicians and task team members would be positioned to be the signpost of that privatization.

Clyde Ramalaine
Political Commentator and Writer
Chairperson of TMoSA Foundation – The Thinking Masses of SA
PICTURE: Supplied