Eskom chairman Nyati on winning a freight shedding war and a bright future ahead

Eskom chairman Mteto Nyati says cynics are wrong to say he will return to dumping hell after the 24 May 29 elections. He believes SA’s longest non-discharge streak in years is built on a solid foundation. The mechanical engineer with an impeccable business track record explains how SA’s improved power supply is the result of sound management practices, including performance-related incentives for Eskom staff and productive engagement with its shareholders. He confidently predicts that the worst of load shedding is over and that there will be enough capacity to support future economic growth. Nyati spoke with BizNews editor Alec Hogg.

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Interview highlights

In this interview, Alec Hogg speaks to Mteto Nyati, President of Eskom, about the significant progress made in reducing load loss in South Africa. Nyati, who has a notable career track record, explains the board’s proactive approach since his appointment, emphasizing his commitment to power plant managers and management to understand and address issues. He clarifies that while he is not CEO, the board has taken a hands-on approach due to the crisis situation.

Nyati highlights the board’s two-year recovery plan, now halfway through its implementation, which has significantly improved the situation without over-reliance on diesel generators. He acknowledges that while lower stages of load shedding are still possible, higher stages are less likely.

Nyati attributes the success to a collaborative effort, including the groundwork previously done by Jan Oberholzer, and emphasizes the importance of maintaining strong relationships with stakeholders, especially government ministers. He discusses efforts to combat internal corruption using advanced technologies and external assistance.

As for future plans, Nyati expresses optimism about Eskom’s trajectory, highlighting ongoing projects such as the separation of the company and improvements in coal logistics. He envisions a future in which Eskom can meet the country’s energy demands, supported by renewable energy contributions from the private sector, and hints at a personal inclination to step back once stability is achieved.

Edited transcript of the interview. ___STEADY_PAYWALL___

Alec Hogg (00:00:10) Well, we have surpassed 50 days without load shedding here in South Africa. It almost feels like a new world. The man blamed for this is Eskom chairman Mteto Nyathi. He recently wrapped up a successful run as CEO of Altech and previously ran much of MTN. We will hear from him about the current state of Eskom and the challenges ahead. When we spoke in Bryanston, you had just been appointed to the Eskom board. President Ramaphosa approached you and you saw it as a kind of national service. He has made significant changes, emphasizing governance and independence. Are you more of an executive chairman than a non-executive?

Mount Nyati (00:01:26) I would say the entire board decided to participate because of the crisis at Eskom. We respect governance, but we needed a deep understanding of the issues. We often interacted directly with the CEOs of the power plants to get quality information. This allowed management to create a recovery plan, which we approved in March of last year. I am not CEO. Our CEO was asked to avoid media interactions for the first 100 days to fully understand the issues. You will see it more after this period.

Alec Hogg (00:03:19) It was interesting to read in the Financial Times that you said load shedding is a thing of the past. Can you elaborate on that? It’s good news for a nation eager to hear it.

Mount Nyati (00:03:37) Yes, the question was about the diesel situation and whether we are avoiding load shedding by using open cycle gas turbines. The answer is no; Our power plants are working well. However, we are only one year into a board-approved two-year plan. The chances of higher stages of load shedding are much lower due to the work done last year.

Alec Hogg (00:04:36) There was an interview with Professor Sampson Mamphweli, head of energy at the University of Pretoria, where he expressed doubts about the end of load shedding. He mentioned the possibility of level five load shedding in a bad winter. what do you think about it? Did Jan Oberholzer lay the groundwork for what we are seeing now?

Mount Nyati (00:05:17) The board and management worked hard together to create the recovery plan approved in March. This plan was developed with input from the generation team, not just the CEO. In presenting it to external stakeholders, we have the full support of the leadership team.

Alec Hogg (00:06:52) With the elections approaching, Gwede Mantashe mentioned that having an engineer running Eskom has made a difference. What do you think caused the bad blood between André de Ruyter and the politicians or shareholders?

Mount Nyati (00:07:36) I don’t know all the details, but stakeholder management is crucial. We have built relationships with different ministers, understanding their perspectives and focusing on Eskom’s interests. This approach has helped us leverage support and manage challenges effectively.

Alec Hogg (00:09:38) Pravin Gordhan has said Eskom was the epicenter of state capture. With the R500 billion injected by taxpayers, have you started to recover any of that and bring the wrongdoers to justice?

Mount Nyati (00:10:18) We are addressing multiple priorities, including keeping the lights on, unbundling the company, and cleaning up corruption. We use external companies and AI technology to strengthen investigations. We know who is involved in corruption and we are working with authorities to carefully address it.

Alec Hogg (00:12:35) The Financial Times reported on corruption at India’s Adani Group, similar to what the Guptas did here. An Eskom chief coal scientist, Dr Mark van der Riet, rejected imports of low-quality coal and faced serious consequences. How does Eskom address issues like this?

Mount Nyati (00:14:09) Our goal is to leave a legacy of excellence with strict controls. We launched a tender to automate coal transportation, eliminating human interference. Using technology like IoT, we track coal movements to avoid problems. By the end of this year, this system will be implemented in all our plants, significantly reducing problems.

Alec Hogg (00:17:34) His term as chairman of the board of directors will end in October next year. Do you plan to continue?

Mount Nyati (00:17:54) I did not initially plan for this role and cannot speak for the other board members. Personally, my goal is to leave behind a stronger organization with the right leadership. By then, Eskom should be stable and it will be time for new leaders to take over.

Alec Hogg (00:18:45) The separation law was expected to soon become law. Is that still in play?

Mount Nyati (00:19:04) We don’t have a direct idea of ​​the moment chosen by the president, but we are prepared for what happens. Competition will make us better and we are focused on supplying electricity profitably without fueling inflation.

Alec Hogg (00:20:09) Will Eskom be able to supply enough electricity for South Africa’s growth and permanently end load shedding?

Mount Nyati (00:20:49) The future is bright. Private generation capacity is increasing and our focus on reducing unplanned outages has already had a significant impact. Our goal is to further reduce these outages, which will provide the necessary power. With the addition of renewable energy, I am positive about the future.

Alec Hogg (00:24:10) Eskom Chairman Mteto Nyati. I’m Alec Hogg from BizNews.

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