Eskom appoints new CEO, but can Andre de Ruyter save the power-utility?

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Eskom officially has a new chief executive officer (CEO). Currently, the CEO of Nampak, Andre de Ruyter’s appointment is one which comes as a surprise to many.

While he has considerable corporate experience as the CEO of Nampak, De Ruyter does not have any experience at state-owned companies. Despite this, the ANC and DA are both supporting him.

While admitting he has a daunting task ahead of him, both political parties believe South Africans must support him, as he prepares to tend to the well-being of Eskom.

Officially taking the role of CEO at Eskom in January 2020, it seems not everyone is happy with his appointment.

The EFF views De Ruyter’s appointment as anti-transformation and racist. The political party also feels his appointment is a deliberate attempt to destroy Eskom in order to rationalise privatisation.

Prior to Nampak, De Ruyter spent more than twenty years at Sasol in various senior management roles. He has also overseen work in the US, Germany, China and African nations including Nigeria and Angola.

As he prepares to embark on his journey with Eskom, the Department of Public Enterprises says the recruitment process took two forms. This was a head-hunting process and seeing a public advert placement for external and internal participation.

Furthermore, the following process was followed:

  • The search agency received a list of 142 potential candidates. This list included eight Eskom employees.
  • The first shortlist of 17 individuals was formulated and they were then interviewed by the agency. From the 17 applicants, eight potential candidates withdrew.
  • The Board interviewed six candidates.
  • Four candidates were requested to undergo competency tests.
  • The final interview process was undertaken. After this, the panel ranked three candidates from six.
  • After further interviews, a list of three candidates, with the indication of a preferred candidate was submitted to the shareholder. This is in terms of the Memorandum of Incorporation (MOI) between Eskom and the government.
  • The president then appointed a team of cabinet ministers to consider the Boards recommendations.
  • The Ministers concurred with the Board’s recommendation.

But is De Ruyter the ideal candidate to lead Eskom?

Andre de Ruyter, (Photographer: Waldo Swiegers/Bloomberg)

The energy coordinator at the National Union of Mineworkers, Paris Mashego claims the new CEO’s credentials are questionable, adding that De Ruyter destroyed Nampak.

This follows Nampak’s share price plunging from R48.85 in November 2014 to R6.85 over the past week.

De Ruyter’s compensation came to R16.5 million in 2018, including a staggering R8.8 million bonus. This is despite the company’s share price sinking by 15%.

However, the Department of Public Enterprise states that De Ruyter has accepted a compensation package which is lower than what the position actually pays.

Furthermore, the absence of political allegiances means it will be unlikely that he will participate in political battles, which the position often demands.

According to Darias Jonker, a London-based director at the Eurasia Group, the lack of political allegiance shows that the Ramaphosa administration wants De Ruyter to rather focus on Eskom’s management. Not politics.

With a daunting task ahead of him, will Andre de Ruyter be able to turn Eskom’s financial dilemma around and see the power utility make a profit? Only time will tell…

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