Eugene Brink: New government needed to save SOEs; after de Ruyter’s Eskom nightmare

A change of Government is needed to save South Africa’s State-owned Enterprises (SOEs). This after the horror management experience of former Eskom CEO André de Ruyter who tried “every which way to rectify the troubles and the travails that Eskom had and still has”, but did not have the necessary political backing – and failed in the end. That is the opinion of independent political analyst Eugene Brink who guides BizNews viewers through the contents of De Ruyter’s explosive exposé of his time at Eskom. He says, apart from a change in Government, only some form of privatisation would be able to save many of the country’s SOEs. – Chris Steyn

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Relevant timestamps from the interview

00:00 – Introductions
00:29 – Eugenene Brink on de Ruyter’s book, Truth to Power
07:48 – Brink on whether CEOs can run SOEs without political backing
15:34 – On what can save SA’s SOEs
23:45 – Conclusions

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Highlights from the interview

A change of Government is needed to save South Africa’s State-owned Enterprises (SOEs).

This after the horror management experience of former Eskom CEO André de Ruyter who tried “every which way to rectify the troubles and the travails that Eskom had and still has”, but failed in the end.

That is the opinion of independent political analyst Eugene Brink who guides BizNews viewers through the contents of De Ruyter’s explosive exposé of his time at Eskom.

Brink doesn’t believe that it is actually possible for any CEO to run a SOEs successfully without political backing. “I think, as this book illustrates, it is really difficult. I think first you have to deal with government inaction or policy paralysis. The broad church of the ANC (African National Congress) and also…it’s something that I could never understand, this consultative leadership with each and every decision that has to go back to whoever else and then nothing ends up happening.

Read more: Cyril Ramaphosa: The Emperor is naked and afraid – Eugene Brink

“And as long as the government, with its inaction and then also with its harmful policy making, not only…policy paralysis, but negative harmful policies, makes life difficult for people who really want to run a clean ship and a tight ship and want to do the best with the state-owned enterprises…

“I think, a change, a change of government, seeing that the government is so involved still in much of what’s going on at state-owned enterprises. I know it’s a contentious…thing to say, but it’s the truth. You can’t have the ANC, who is patently corrupt…”

Brink says the CEO of Eskom has to run a “tangled web that just makes that job absolutely impossible unless you’re a lackey, unless you’re a cadre from the ANC being deployed to just make up the numbers and hold press conferences and defend everything that’s going on…

Read more: Political analyst Eugene Brink: The toxic break up between de Ruyter and the ANC over Eskom

“You have to deal with political role players and various ministers. You have to deal with the president. Then you have to appear before Scopa every now and then…

“I think no MBA in the world can prepare you for something like this… I think nothing can prepare you for something like this…unless you have wholesale political support, I think, which he (De Ruyter) didn’t quite have – even in the beginning. And that dwindled later…”

Brink believes that – apart from a change in Government – only some form of privatisation can save the country SOEs.

“…I think privatisation of many of them, and there are many of them. I think there’s something like 300 and something SOEs. I think it is increasingly important that you need to look at some form of privatisation…but it’s so politically sensitive to just sell them off.

Read more: Frank Chikane takes charge: Promising steps toward ANC integrity and anti-corruption reform – Paul Hoffman

“They were created a long time ago – and the ANC saw, okay, well, here’s an opportunity first for making money, you know, corruptly or legitimately. And yeah, they just carried on with it. But they mismanaged these places to such an extent that they don’t have any skills left in them. They don’t have much or many assets. It’s not worth much.

“Eskom is a different story because it’s almost certainly at this stage too big to fail. And…it will be too politically sensitive to privatise something like Eskom.”

Brink says it is therefore “incumbent” on the many other role players to start providing power to the grid “and they need to open up the transmission lines so that consumers such as us, households, businesses, big and small, all have a choice in where we want to actually buy our electricity from.”