War Room Revived to Tackle South Africa’s Electricity Crisis

JOHANNESBURG (Capital Markets in Africa) – South Africa’s government revived a so-called Energy War Room to tackle the nation’s electricity crisis, as it brought forward the date when the incoming chief executive officer of the state power utility will start work.

The team, to be headed by Deputy President David Mabuza, will seek to avoid a repeat of a nine-day blackout earlier this month that risks tipping the economy into recession. Debt-ridden Eskom Holdings SOC Ltd. is struggling to meet the demand for electricity because of its failure to properly maintain aging plants and invest in new ones.

In addition to Mabuza, the war room will consist of Finance Minister Tito Mboweni, Energy Minister Gwede Mantashe and Public Enterprises Minister Pravin Gordhan, Minister in the Presidency Jackson Mthembu told reporters at a cabinet briefing Tuesday in the capital, Pretoria.

“The team will deal with any challenges to our energy supply in the country,” he said.

The government previously established a war room in December 2014 to deal with electricity shortages that contributed to an economic contraction in the second quarter of the following year. That team was tasked with improving power maintenance and debt-collection processes.

The cabinet also mandated Gordhan to negotiate with incoming CEO Andre de Ruyter, who is scheduled to start on Jan. 15, to take up the position earlier, Mthembu said.

A spokesman for the Department of Public Enterprises didn’t immediately comment on the CEO starting early. No one was available at Mabuza’s office when Bloomberg sought comment.

“De Ruyter, together with his management team, will immediately deal with the concerning issues of governance, lack of financial management as well as stabilize the operations of Eskom,” Mthembu said. “This includes dealing with the huge backlog of maintenance of the aging fleet of their power stations and the structural defects” at other plants, he said.

Source: Bloomberg Business News