S.Africa's Eskom launches probe, suspends execs after blackouts

12th March 2015, Comments 0 comments

South Africa's state-owned power company Eskom suspended Thursday its chief executive and three other top officials as its board launched an inquiry into the troubled utility after a series of crippling blackouts.

Eskom has been struggling to keep the lights on in Africa's most advanced economy since November with consumer demand repeatedly eclipsing supply.

"To ensure that this process is as transparent and uninhibited as possible, the board has also resolved that four of its senior executives... should step down for the duration of this enquiry," said Eskom Chairman Zola Tsotsi.

The inquiry, which will be carried out by "external parties", is to probe delays in the completion of new power stations, poor performance of plants and financial challenges, among other things.

The government had been warned as far back as 1998 about a possible system collapse in a policy document presented to parliament.

But it was only in 2007 that construction began on the country's first new power station in 20 years.

In 2008, South Africa was hit by an energy crisis that forced its mines shut for days, cost the country billions of dollars and led to a sell off in the rand.

Since then power rates have skyrocketed in an effort to provide the utility with the cash it needs to upgrade a system which is frequently at capacity. However, the company was still struggling to meet demand.

The government-backed inquiry launched Thursday is expected to take three months to conclude.

The board appointed interim officers to replace Eskom Chief Executive Tshediso Matona, who has only been in his job for six months, as well as the executives from the finance, group capital as well as commercial and technology departments.

However, emerging markets analyst Peter Attard Montalto at Nomura International called the inquiry "an unnecessary distraction at a time when Eskom needs decisive, stable and strong leadership."

"Even if an inquiry is needed it is unclear why senior leadership has to be removed."

The vital power producer has been hobbled by years of underinvestment and ageing infrastructure as well as governance problems.

The company generates about 95 percent of the country's electricity, and is banking on the two major coal-fired power stations to help ease shortages.


© 2015 AFP

0 Comments To This Article