JOHANNESBURG, Eskom, South Africa’s State-owned power utility which is seeking electricity tariff increases of almost 20 per cent on avergae, says it has adopted a plan to rebuild governance and the company’s integrity.

We have adopted a five-path plan to rebuild a robust governance process and preserve our core value of integrity. This includes strengthening our general internal ethics and fraud framework, where we have reviewed and approved our ethics and fraud management policy,” said its interim Group Chief Executive, Sean Maritz, on Thursday.

We have started on an education drive called ‘The Way’, for the Eskom Board, leadership and employees on their responsibilities towards ethical conduct and reporting.”

Speaking in Midrand, Johannesburg, during the last leg of the series of public hearings conducted by the National Energy Regulator of South Africa (Nersa) into Eskom’s tariff revision request, Maritz said the company’s Executive Committee had resolved to take bold action to shift the parastatal’s reputation towards positive change.

Nersa has held public hearings countrywide to give the public an opportunity to have their voice heard on the power utility’s tariff increase request. Eskom is asking the regulator for a total allowable revenue of 219.5 billion Rand (about 15.6 billion US dollars), which translates to a 19.9 per cent average increase in electricity tariffs.

Eskom said the regulator’s public hearings had offered it an opportunity to share the merits of its one-year tariff application covering the period from April 2018 to March 2019. Maritz said during the process, Eskom had shared an honest representation of its business as well as what it would require to remain on a firm operational footing.

The fulfilment of these requirements will enable us to deliver on our primary mandate of providing electricity in an efficient and sustainable manner while we continue to play an important role in sustaining the economy of South Africa.

Eskom is also implementing independent audits on leadership where members of the Executive Committee, Divisional Executives and Senior General Managers will undergo regular independent lifestyle and conflict of interest audits. They also commit to co-operate with all independent inquiries on corruption, when required to do so, Maritz said.

In addition, Eskom is also terminating all irregular supplier contracts and work. I can confirm that the McKinsey contract was terminated in July 2017. The contract with Impulse International has been suspended, pending the outcome of a forensic investigation. There are no dealing with Trillian contractually or otherwise. A legal verification was instituted on McKinsey, Trillian and Impulse after respective investigations conducted by independent investigators,” he said.

Independent audits on the Tegeta contracts have been clarified as being within range of other similar contracts and all control gaps have since been tightened, Maritz told the public hearing.

Governance issues at the utility are also being addressed, ensuring that decision-making powers fall within appropriate levels of management. Having also recently created additional governance structures for tender approvals, we are thereby creating the opportunity to increase the focus and time for robust scrutiny,” he said.

We are instituting disciplinary charges and taking legal action if required. To date, we have suspended eight members of leadership, who have allegedly been involved in governance irregularities. Four of them are from my executive team. We have also instituted criminal charges against certain Eskom management in this regard.”