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R30m handshake is nothing new… so why the howling now?

Date Released: Fri, 2 June 2017 12:14 +0200

R30m handshake is nothing new… so why the howling now? The reality is that it is not out of sync with top execs' packages, writes Wesley Seale.

If anything, South Africans can take cold comfort from the fact that our democracy is working, and coupled with the phrase “hypocrisy of the highest order”.

We witnessed this in the Brian Molefe saga and the appearance of Public Enterprises Minister Lynne Brown, and the chairperson of the board of Eskom, Dr Ben Ngubane, before the parliamentary portfolio committee on public enterprises.

 The minister was explicit in welcoming the opportunity to account before the committee, and even had her deputy, Ben Martins, at her side.

It is important that South Africans reflect on what the issues are instead of once again focusing on personalities. Instead of concentrating on Brown, Ngubane and even Molefe, it is important for us, as a country, to engage what is at play.

First, we must appreciate the outrage of awarding an individual a payout of R30 million. In a country where inequality is as stark as it is, it is unacceptable for an individual, within a matter of 18 months, to have to be awarded that amount of money; never mind that it is taxpayers’ money.

 Yet it was the minister herself that led this outrage, after reading about it in the media, and it is she who led the charge and instructed the board to re-examine Molefe’s exit from Eskom. We must acknowledge and appreciate this.

The reality in our country, unfortunately, is that Molefe stood the chance of benefiting from this amount of money, which some hardly make in three generations, because it is not out of sync with the packages of top executives.

 As a country, we should be outraged with the vast s of money earned by top executives. The reality is that no matter what we think of Molefe, he does possess the requisite skills and calibre to head a private entity. Can the public sector afford to lose this kind of skill and calibre?

But South Africans have become acclimatised to golden handshakes for state-owned enterprise bosses over the years. Coleman Andrews, former chief executive of SAA, broke the record by walking away with R232m. This after Andrews spent a whopping two years at the airliner, and all of this under the watch of Trevor Manuel as finance minister and Jeff Radebe as minister of public enterprises.

No howling.

In a parliamentary reply, Dali Mpofu, EFF legal guru, is said to have received millions to walk away from the SABC.

 Yet, no howling.

During the peak period of blackouts in 2008, the top brass at Eskom, including board members such as then-board chairman Valli Moosa, were paid handsome packages. Moosa, for example, was paid R1m after attending only 14 meetings at the power utility, according to its 2006/07 annual report. Thulani Gcabashe, the chief executive of Eskom at the time, took home a package of over R6m in that same financial year.

Again, no howling.

Defending the Eskom payouts, then-minister of public enterprises Alec Erwin defended the fat cat salaries to executives because, he was reported as saying at the time, they were market-related. Today we have to ask: is a R30m payout to Molefe not market-related?

Why the howling now?

Yet this time, the minister halted the process and sent the board back to the drawing board and she is criticised for doing so.

No concern in the past for taxpayers’ money then, certainly not from ANC MPs, or even from Treasury officials. But suddenly, there is a concern over this handshake. Why the different reactions?

Second, it would seem that in the ANC caucus, at least some members, are playing to the gallery and kowtowing to the opposition. Suddenly now there is a detailed interest in the memorandum of 2014 and the one of 2016 which governs the chief executive’s appointment and contract.

While parliamentarians have all the right to demand questions from the minister, who must give political oversight to SOEs, it is the constitutional duty of MPs, even ANC ones, to hold the executive to account all the time.

Yet, as South Africans we must pay attention that the current challenges with Eskom, which are minuscule compared to the challenges that Eskom experienced in the past, are not used to score cheap political points and that SOEs and their governance are not dragged into the factional battles of the ANC.

Why suddenly have ANC MPs woken up – or why now are they more vociferous in holding the executive, at least some in them, to account? Is it because it is an election year for the ANC?

Finally, the reality is that no matter what happens at Eskom, the most important thing is to keep the lights on, and this to a large extent, is thanks to Molefe.

 In 2014, it was difficult, according to the International Monetary Fund, for the South African economy to grow more than 2% because of the impact of load shedding on the economy.

R30m handshake is nothing new… so why the howling now? The reality is that it is not out of sync with top execs' packages, says

In delivering his Budget speech in February 2015, then-finance minister Nhlanhla Nene said: “… Electricity constraints hold back growth in manufacturing and mining, and also inhibit investment in housing and raise costs for businesses and households…”

In August 2016, after the annual general meeting of Eskom, Brown announced that South Africa would be experiencing load shedding for the next 18 months. That 18 months would have ended in March 2017. The following month, after Brown’s prediction, Molefe was appointed chief executive and Ngubane was appointed chairperson of the board.

Immediately, the effects of Ngubane and Molefe’s presence were felt, even though both had been acting in their positions before their appointments. So successful were their efforts that Brown could announce in her Budget speech in April 2016, less than seven months later, that “… for the longest of time, South Africans have had their lights on and load shedding has become a distant memory…”

While good governance is important, it is worth less than the practices it espouses if people are doing good governance in the dark. Eskom is in a better state than it was when Molefe took over and the minister should be commended for suggesting that the public would get more from their taxes if Molefe returned to Eskom than if he were paid out.

Sadly, while political parties across the parliamentary aisle seem to be taking aim at Brown, who actually halted the payout unlike other ministers have done before, and as they condemn the board of Eskom and its chief executive despite their tireless efforts to keep South Africa out of the dark, a deafening silence continues to come from them in respect of the opportunism displayed by Glencore in the first instance.

As Eskom reported towards the end of last year, Glencore had demanded nearly triple the price for coal than it was supposed to be sold for. Yet, despite knowing that taxpayers’ money would have to foot this bill, we hardly hear anything from MPs, and especially the opposition parties.

In other words, it would be considered usual for companies such as Glencore, to demand inflated prices from the fiscus.

 Unfortunately for Molefe and the Eskom board, they refused to abuse taxpayers’ money and rejected Glencore’s demands.

If anything, it would seem that this was Molefe’s sin – he had gone against white monopoly capital.

* Wesley Seale teaches politics and international studies at Rhodes University.

RED FLAG: Public Enterprises Minister Lynne Brown speaks at an Eskom board hearing held at Townhouse Hotel in Cape Town. Picture: Courtney Africa

Source: http://www.iol.co.za/capeargus/r30m-handshake-is-nothing-new-so-why-the-howling-now-9495542

 

Source:IOL