Will the lights go out on South Africa's World Cup?
A race row at the top of the national power company has left it without a leader
Wednesday 11 November 2009
An ugly race row has left South Africa's national power company leaderless and is threatening to turn the lights out in the country only nine months before it is due to host the World Cup.
Bobby Godsell, the chairman of Eskom, which generates 95 per cent of electricity in sub-Saharan Africa's biggest economy, resigned this week after being accused of trying to force out his black chief executive.
The power struggle comes as experts warn that South Africa faces another season of blackouts that have prompted national emergencies in the past two years. It also highlights the crisis of leadership in Jacob Zuma's new government, which is being accused of appeasing "racial populists" as it seeks to contain strongly divergent voices within the ruling ANC party.
The saga at Eskom began last week when the two rivals – Mr Godsell and the CEO Jacob Maroga – laid out competing visions for the troubled state-owned power generator. Analysts said the chairman's plan concentrated on a business-like agenda of opening new power stations and restoring industry confidence, while the chief executive's programme concentrated on re-engineering the ethnic balance of the company's workforce. The board is believed to have sided with Mr Godsell, prompting the resignation of the chief executive, announced late last week.
What had, up to that point, been a business story suddenly exploded into a race row as the outspoken ANC youth-wing leader Julius Malema accused Eskom of pushing out Mr Maroga because he was black. The Black Management Forum, a national lobbying group, then issued an incendiary statement saying state-owned corporations were becoming a "slaughterhouse" for black professionals.
After the race furore Mr Maroga quickly moved to rescind his resignation, and then, over the weekend, both men were reported to have met with President Zuma. On Monday, in a move that rocked markets, the respected Mr Godsell tendered his resignation, leaving Eskom without a chairman.
"This is a complete disaster," said Professor Adam Habib, a political commentator based at the University of Johannesburg. "We have a major leadership tussle in the middle of an energy crisis. It's really irresponsible."
That energy crisis has already prompted concern within world football's governing body, Fifa, which has demanded the provision of an army of back-up generators to avoid the possibility of the lights going off during its global showpiece tournament.
Organisers of the 2010 event faced another setback yesterday as an important transport project was delayed and is now not expected to be ready in time for the June kick-off. The ambitious "Gautrain project" – linking Johannesburg and its airport with the capital, Pretoria – will not be finished until halfway through the tournament after the government refused to bow to contractors' demands for an extra £107m to meet the deadline.
South Africa is already in talks with industry leaders over a "go-slow" during the World Cup in order to ensure that the power needs of the event can be met. Marc Goldstein, an analyst with research group Frost and Sullivan, said that investor confidence would be shaken by Mr Godsell's departure. "This is not a situation that anyone would have wanted," he said.
Yesterday, the ANC's secretary general Gwede Mantashe rubbished claims that Mr Godsell is a racist, describing him as popular within the unions and the ANC. "Everybody must be careful. If there's a crisis, they begin to be personal and go to the lowest level of irrationality," he said.
The race card has quickly led to another debate on South Africa's troubled Black Economic Empowerment initiative – conceived to address the wrongs of the apartheid era but accused of being a wellspring of cronyism. "Black economic empowerment is essential," said the former ANC MP Andrew Feinstein. " But the way it has been done is an unmitigated disaster."
In recent months the government has lurched from one crisis to another in its state-owned enterprises, or "parastatals", with rows over political interference and mismanagement in the transport giant Transnet and the South African Broadcasting Corporation.
"The parastatals' woe reflects the broader picture of what's happening in government," said Mr Feinstein. "Zuma's desire to keep everybody happy means he is not leading."
So far the government has refused to comment on its alleged role in the leadership battle at Eskom but, if the board did accept the CEO's resignation, then only high-level political intervention can have overturned that decision, Professor Habib explained. "For God's sake, how does one government have crises in three parastatals at the same time?"
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