ENRON & ESKOM, episode 2

In a previous posting "Caught between ENRON and ESKOM", I drew a somewhat tenuous link between ENRON and ESKOM. I did not for even a moment consider or suggest that ESKOM may be manipulating South Africa's power supply in the same manner that ENRON did to California early in this century.

A letter in the influential newspaper, Business Day, has opened my eyes to that possibility. The letter by a reader, André Becker, was published on 31 January under the heading "Is ESKOM doing an ENRON on SA?". Becker relates a discussion he had with an anonymous senior ESCOM executive. The official alleged that ESKOM in fact had sufficient power supplies, but that an executive decision was reached to manipulate supply in order to teach government a lesson and in the process to protect executive bonuses. Government previously granted ESKOM lower than requested tariff increases, which together with the funding costs of new facilities, would severely and unacceptably impact future executive bonuses. Is the whole country thus paying the cost of executive greed?

The ESKOM official further alleged that the current maintenance problems experienced by ESKOM (but which they vehemently deny), were caused by the fact that executive bonuses were previously based on savings against budget. The savings that "justified" high bonuses also led to the loss of skilled staff and the neglect of maintenance.

These allegations must for the moment be regarded as unsubstantiated. The only evidence supplied by the official is that the rolling blackouts (euphemistically called load- shedding) started after the summer holidays, whereas there were no supply problems before the holidays.

The exorbitant salaries paid to ESKOM's top management and the obscene bonuses they declared for themselves last year, however, lend some credence to the allegations. ESKOM executive's clumsy handling of the power crisis, whether it was caused by imcompetence or design, lost them all credibility. They can restore some credibility by instituting a full, transparent and independent public investigation into the whole mess.

One can't help but to wonder whether, if around the turn of the century, both ESKOM and government had exhibited greater critical thinking skills and mindfully examined the evidence they had available to them, we would have been in this crisis? The same question could of course have been asked about Lay, Skilling and ENRON.

But then again, not even the critical thinking ability of a Socrates would have stood up in the face of raging greed.