Publication: Mail and Guardian Issued: Date: 2010-06-11 Reporter: Kevin Davie

The strange case of the resignation that wasn't

 

Publication 

Mail and Guardian

Date

2010-06-11

Reporter Kevin Davie
Web Link www.mg.co.za
 


There is something sad about the South Gauteng High Court. The main building is imposing enough, but I guess that too many broken people come through these doors for them to be anything but depressing.

Senior counsel stand in grand splendour as though posing for an oil portrait, but if you look closer you find that their black gowns are invariably crumpled, even worn.

The judges have the authority to jail people forever and to make awards running into billions, but the public toilets leave much to be desired. And we moved three times between courtrooms until one could be found where the equipment for the stenographer was working.

I was there to observe the case of Jacob Maroga versus Eskom, Mpho Mkwana and the public enterprises minister, in which Maroga is claiming R85-million for loss of earnings. Mkwana is Eskom chief executive.

My interest was in part piqued by Eskom's results published the previous week, where a nifty turnaround was achieved just by getting a new deal from BHP Billiton on the cut-price electricity Eskom has been supplying to its aluminium smelter at Mozal.

The deal reportedly resulted in a R2,2-billion benefit for Eskom *1. So Eskom is a winner, the losers being BHP Billiton, which owns 47% of Mozal, and the Industrial Development Corporation, which owns 25%, Mozambican interests holding the rest. Note that the state (Eskom) has been supplying electricity at give-away prices (12cents a kilowatt hour) to an entity in which it has a 25% interest (the IDC).

During 2009, tensions between then-Eskom chairperson Bobby Godsell and Maroga, then chief executive officer, grew, with Godsell telling Barbara Hogan, the public enterprises minister, that Maroga had been the cause of him getting shingles.

A key point of tension, reflected in the court papers, was repeated calls by the board, in October 2008 and June and September 2009, for management to meet BHP Billiton to negotiate new prices. You can see from the R2,2-billion saving, announced last week, that there was some urgency to do this.

This is just from the Mozal smelter. Negotiations over BHP Billiton's other smelters are continuing, as is the case for Anglo American's Skorpion smelter in Namibia.

Maroga claims he was unfairly dismissed and not warned that his performance was substandard. He was even given a 70% performance appraisal by Godsell, his performance being good enough to get him a bonus of R2,2-million. He wants his job back and an apology.

Eskom says that Maroga quit. He offered to resign, as did Godsell, at a board meeting. The two recused themselves, the board deliberated and decided to accept Maroga's resignation. It sent two board members as emissaries to a dinner with Maroga and Godsell at the Sandton Sun, where the acceptance of Maroga's resignation was communicated. Maroga, says Eskom, did not demur, but indicated he would participate in the exit process.

But, according to Eskom, Maroga *2 had a change of heart and instead announced that he had not resigned.

Judgment was reserved.

With acknowledgements to Kevin Davie and Mail and Guardian.



*1       Eskom is indicating a turnaround from a loss of nearly R10 billion in 2009 to a profit of R2,3 billion in 2010.

Maybe only R2,2 derives from the new Mozal deal.

But it may be a lot more.

But Eskom has always been into voodoo economics.

Now it is into voodoo accounting.

But Mozal is just one aspect of how Eskom and the SA Government firstly ripped of their customers and taxpayers with the Alusaf and Mozal deals and secondly how they injured and damaged them by this causing serious loadshedding for a continued period of time.

I have it on good advice that we can again expect serious loadshedding in 2011 to 2013.

Right now during the Soccer World Cup Eskcon is using or standing by with its diesel peaking generators that produce electric power at R5 to R10 per kiloWatthour - yes, ten to twenty times the product cost using coal or uranium.

These dweezils (apologies to Frank Zappa and his son) use the inefficient open cycle gas turbines for 100 MWatt peaking power stations because they never spent the money to convert them to the far more efficient closed-cycle gas turbine generators.

At the same time Eskcon is dragging its feet on creating a legal and administrative regime for Independent Power Producers (IPPs) to sell renewable energy.

The IPPs could quite easily cover Eskcon's shortfall at peak consumption time or even when a base load power station fails or is taken down for maintenance.


*2      This is a whipper-snapper who knows diddly squat about engineering, finance, management, personnel.

He suddenly thought, probably after consulting a labour practitioner working on contingency, that he could make a good few bucks out of the deal.

Don't be surprised if there is suddenly an out of court settlement because the whipper-snapper will know how Billiton had its contacts extended by the ANC regime in circa 2005.

Don't be surprised if Pinnoccio's name comes up in this issue.

The snapper will surely have kept some of his powder dry and now that both parties have shot their public bolts the risk of exposure to information release and R85 million high water mark suddenly results in a very nice R20 to R30 million out of court confidential top-secret settlement.

In reality, the snapper should be repaying all his bonuses and other emoluments plus interest at the maximum usury rate for causing the country billions of Rands worth of losses under his political tenure.

A little investigation into a BSc(Eng) and MBA might well not be out of place.