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South African power utility Eskom has said that it will start looking for a new CEO after former CEO Jacob Maroga quit, ending a long leadership battle at the company. The loss of both Maroga and Eskom’s chairman Bobby Godsell this week has caused questions to be raised over the running of Eskom. The leadership crisis could further unnerve mining firms and foreign investors, uncertain whether the company will be able to supply enough power to run mining operations after the energy problems of early 2008.
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Eskom’s acting Chairman, Mpho Makwana, told a news conference that he had been entrusted to run the company until the appointments of a new Chairman and CEO, and that the Government stood fully behind the group’s board. Makwana said that Eskom hoped to find a candidate for the post of CEO within 90 days. Makwana said that Brian Dames, Head of Generation, and Erica Johnson, Head of Customer and Network Services, would run Eskom’s operations in the interim.
Analysts have said that the departure of former Chairman Godsell suggested that there had been political interference, and that the markets would only regain confidence in Eskom if two respected and credible new leaders were appointed. Peter Attard Montalto, an Economist with Nomura International Emerging Markets, said: “The appropriate choice for the two positions is the only way that markets can regain confidence in the company, its debt issuance programme, and indeed the wider state-owned enterprises sector.”
Maroga’s tenure was marked by power shortages, a record loss of 9.7 billion rand ($1.31 billion), and electricity price rises that have been criticised for stoking inflation as the country battles recession. Eskom is struggling to raise funds to pay for its expansion programme, needed to feed fast-rising demand, especially as credit markets remain tight.