Dudu Msomi's contribution, "Parastatal politics" (On My Mind November 27) shows the urgent need for a fresh start to the status and governance of Eskom. It is a "parastatal" only in that it is funded by taxpayers and bondholders via government, and its notional profit is retained only for anticipated demand growth and equipment replacement.
It does not need political oversight if it is apolitically constituted because it provides an essential service across the spectrum regardless of who's in power from time to time.
There is absolutely no necessity for Eskom, or its board, or its management to be political in any way whatsoever as long as the people employed are contractually barred from personal involvement or influence in the acquisition of inputs and equipment.
Only by excluding external politics in every sense can the internal politics of normal interpersonal relationships be minimised and managed.
Eskom is a monopoly and should be free to sell its product at a fixed price, reset annually. No deals should be permitted with "strategic" actual or potential consumers because the losses on these deals are to the detriment of taxpayers. If Eskom sells its product solely and even- handedly to wholesaler distributors, then concessions, if and where warranted, can be negotiated at that lower level and never by the producer.
The board must include no passengers, least of all appointments made as rewards from grateful or hopeful politicians. Therefore the board should comprise senior and broadly experienced people who properly comprehend the entity's managerial challenges in engineering, financial management, futurology, purchasing, law, and staff/labour matters. Initially, board members should be appointed by government as the shareholder, but replacements thereafter should be only after prior consultation with the existing board.
The chairman may be anyone widely recognised and respected for his or her wisdom and appropriate knowledge, preferably someone experienced in nonpolitical public service, and should under no circumstances be an active politician or actively connected with politics.
The reporting line should be directly to government's financial heart according to how that may be set up from time to time.
Eskom is the urgent candidate for recasting, but I suggest that all the other parastatals need similar treatment if we are to have much hope of them functioning without continual extremely costly and internationally embarrassing crises.
Ranking the Analysts 2009
