Electricity Watch

Management failure keeps Eskom in the dark

Eskom in the dark itself

As South Africa is bracing itself for a return of rolling electricity load shedding, consumers will also remain in the dark as to what to expect and what to pro-actively prepare themselves for.

Early in December we complained that the uncertainty “… about when to believe Eskom's statements and when not, has become a massive problem to the South African business sector and a huge threat to the economy as a whole”.

It has now come to light that most of the time the utility itself is in the dark and not in a position to fully inform the public and business sector. The inexperienced management at almost all levels just does not have the integrated information to make properly informed judgments.

It transpired from reports over the weekend that Eskom’s information management system (IMS), critical to well informed management and maintenance decisions, has all but disintegrated over recent years.
A senior Eskom employee with close to 40 years of experience at the utility recently told us that many of the problems at the state enterprise can be ascribed to a dearth of experience that developed over a number of years as large numbers of experienced personnel have left the company.

This situation has been exacerbated by what a Moneyweb report calls concerns expressed by their sources “… about the state of Eskom’s information management system, saying ill-considered cost savings and an exit of skilled staff and consultants are hampering the flow of information within the utility”.

According to the report several tenders for support for Eskom’s SAP-system, compromising its nerve centre, have been advertised but cancelled before they could be awarded. This includes tenders for plant maintenance and materials management.
This situation greatly complicates management’s communication with the utility’s almost 47 000 employees.

“Staff at a power station will for example submit information about required maintenance into the system and one needs the relevant IT skills to ensure that the report is thereafter directed to the right person in management timeously to take the required action, the source explained,” the report states.

All of this has contributed to the situation we described in our December report, stating that “… while blackouts as such are hugely disruptive to the business sector, planning to minimise their impact has now become virtually impossible because statements from Eskom of what to expect have become totally untrustworthy. The general impression is that the electricity utility has lost any semblance of control over the situation.”

And all the signs are there that things are likely to become worse before they become better as the South African economic household is set to return to full speed by next week. Against the background set out above it is unlikely that the utility or even the government’s special electricity crisis task team, led by Deputy President Cyril Ramaphosa, will be able to answer to the Democratic Alliance’s weekend call to “let us know exactly what the current state of affairs is, and what we can expect…”

Top priority for the task team, if the country’s electricity woes are to be solved over the next few years, should probably be to fix the internal structural and management problems. The roots of these problems go back some years to ill-advised policies of the Thabo Mbeki administration.

A report published by EE Publishers in mid-December last year clearly sets out how the failure of government, the Department of Energy, the Department of Public Enterprises, Eskom and municipalities to properly implement the 1998 Government White Paper on Energy Policy led to the present crisis.

The report states among other things that “the hard experiences learned by following government and Eskom’s central command and control approach, and the resulting blackouts of 2008 and 2014, require that the recommendations of the 1998 Government White Paper on Energy Policy be revisited.

“The detailed planning done in the national integrated resource plan for electricity, IRP 2010-2030, should also be revisited in light of the significantly changed underlying economic growth, energy intensity and electricity demand assumptions during the first four years of the plan.

“Proper attention should be given to the 2013 IRP Update, which takes into account the realities of the first years of the 20 year plan, and the associated impact these realities have on demand projections and generation capacity requirements to 2030.

“These recommendations by energy professionals should not simply be ignored by government as it presses ahead with the outdated IRP 2010-2030 plan, regardless of these realities. Otherwise we will face expensive and damaging consequences in the years ahead, as we did by ignoring critical recommendations in the 1998 Government White Paper on Energy Policy.”

The report concludes: “South Africa is rich in energy resources, both natural energy and human energy. We do not have an energy crisis in South Africa. What we have experienced instead is a serious management failure.”

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by Piet Coetzer

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