De Ruyter cracks whip at Eskom: Lifestyle audits extended to lower level staff

Eskom’s new CEO, Andre de Ruyter, has cracked the whip at the troubled power utility, extending lifestyle audits to lower level staff, in a renewed push to clean up graft and wastage.

De Ruyter spoke about lifestyle audits in a speech delivered to staff this week. He called for a range of measures to curb reckless spending, end corruption, and stabilise operations. The CEO was addressing Eskom staff during an employee engagement meeting in Cape Town on Thursday, according to a source with direct knowledge of the meeting.

This follows the same audits of Eskom’s senior managers and their families, starting two years ago, which resulted in a number of disciplinary actions and the referral of staff files to the Special Investigating Unit.

Eskom spokesperson Sikonathi Mantshantsha said the audits that De Ruyter spoke about were a continuation of the clean-up process at Eskom that started two years ago, that had now "cascaded" down to the rest of the staff.

De Ruyter told staff that Eskom’s leadership had become scared to take decisions, after 10 years of state capture, and that accountable leadership had to return to the organisation.

He urged staff to improve customer service, cautioned against a "relaxed" approach in dealing with money, and said there was too much wastage in the procurement environment. De Ruyter emphasised the need to reduce Eskom’s bloated workforce while, at the same time, avoiding forced retrenchments. 

Maintenance

According to the source, De Ruyter emphasised that the number one priority for Eskom now was "preventative, reliable and scheduled" maintenance on its fleet. He had said this during a meeting with trade union Solidarity this week, the trade union’s Deon Reynecke confirmed.

De Ruyter told the employee engagement meeting in Cape Town that, on a good day, 30 000 megawatts (MW) of Eskom’s total installed capacity was available, while about 24 000 MW was available on a bad day.

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Mantshantsha said this week that the "accelerated, deep" maintenance schedule had been approved by the board. He said that, currently, about 6 500 MW of capacity was out on planned maintenance.

De Ruyter has already implemented a planned maintenance schedule on its power fleet for the next 18 months, which means regular load shedding for South Africans, but, it is hoped, it will stabilise the grid.

The Eskom board approved that plan last week.

Cost cutting 

At the employee engagement meeting, De Ruyter said that Eskom had been too "relaxed" in dealing with its finances, and said that the power utility’s debt finance costs were around R28bn a year. He said that R6bn had been spent on diesel in the last financial year, and that R1.4bn had been lost on non-technical losses like theft and vandalism. Tackling corruption and improved governance would be key in turning Eskom around financially, he told staff. 

Skills

De Ruyter said that Eskom had to cut back on staff costs, but that this would be done through voluntary separation and early retirement packages, and that there would be no forced retrenchments. He also said this had to be done while retaining skills at Eskom. 

During a media conference at the end of January, De Ruyter said that the power utility needed to bring back skilled people lost to the organisation as a result of poor management and corruption. But Eskom would do most of this recruiting internally and leave only a small percentage open to the market. A hiring freeze was put in place at Eskom by former CEO Jabu Mabuza in the 2018/2019 financial year.

New generation 

Chris Yelland, managing director of EE Business Intelligence, cautioned this week that maintenance was not going to solve the country’s energy crisis. He said that Eskom’s energy availability factor (EAF), the amount of electricity available to the grid, was at around 60% - much lower than what is envisioned in the country’s energy roadmap, the Integrated Resource Plan, released last year.

He said that the EAF had been averaging around 60% for the first five weeks of the year and that it had been on a downward trend every year. So, while maintenance might stabilise this number, it was unlikely to increase it in the long term, he said.

The IRP notes that the EAF had regressed over the last several years to an average of about 70% in January 2018, and this had resulted in load shedding towards the end of 2018 and the beginning of 2019. Plant performance projections in the IRP were based on EAF levels of between 71% in 2020 and about 75% by 2025. However, Yelland said this was too optimistic.

"The reality is that the power stations are too old and the new power stations (Medupi and Kusile) are performing like old power stations," he said.