The hardest job in South Africa

Eskom CEO Dan Marokane currently occupies the toughest job in the country, reporting to at least two government departments and dealing with widespread corruption and crime, all while trying to keep the lights on. 

Marokane’s predecessors demonstrated the almost impossible nature of the Eskom chief executive position, with the utility having had 14 CEOs in 17 years. 

Eskom was once one of the best-run companies in South Africa and was even recognised as the Power Company of the Year at the Global Energy Awards in 2001. 

The utility provided South Africa with reliable, affordable electricity, which enabled the country to industrialise and grow its economy. 

One key factor behind this success was Eskom’s leadership stability and highly effective succession planning. 

Between 1985 and 2007, Eskom only had three CEOs – Ian McRae from 1985 to 1994, Allen Morgan from 1994 to 2000, and Thulani Gcabashe from 2000 to 2007. 

Since then, Eskom has had a revolving door through which 15 CEOs, interim CEOs, and acting CEOs have passed in just 17 years. 

The utility’s last permanent CEO before Marokane, Andre de Ruyter, described the role as bruising, highly pressured, and extremely complex. 

“I would have liked to be seen as the knight on the white horse coming in and fixing all the problems. Clearly, this is impossible,” he said.

In his book Truth to Power: My Three Years Inside Eskom, De Ruyter explains that Eskom is an extremely complex environment with tremendous political pressure.

“After being Eskom CEO, I feel bruised, especially after being accused of high treason, told not to play policeman, and suffering an attempted poisoning,” he said.

De Ruyter said whoever took on the role after him would have to be a “good, solid, honest patriot” with the necessary business and operational skills to run a utility. 

He also advised the next CEO to have “political nous” to cut through what De Ruyter called the “Gwede knot” and the incoherent nature of reporting to multiple ministries.

Eskom explicitly stated in its recruitment advertisement for the CEO role in 2023 that the candidate would need to comply with all government policies and have unquestionable integrity and ethics. 

Most important among the abilities of the new CEO is the ability to operate in a “particularly challenging environment when it comes to crime and corruption”. 

According to De Ruyter, crime and corruption are endemic within Eskom and the “ecosystem in which we operate.”

It was in this environment that Dan Marokane assumed the top job at Eskom at the beginning of March 2024. 

Dan Marokane inherited a broken Eskom

Marokane inherited an Eskom in severe trouble, both operationally and financially. In 2023, the country experienced record levels of load-shedding and needed a government bailout to survive. 

In the year before his appointment, South Africa suffered 205 days of load-shedding as its coal-fired plants regularly broke down, and it ran out of money to buy the diesel needed to supplement its capacity. 

President Cyril Ramaphosa said, just before Marokane was announced as CEO, that he would applaud anyone who takes that job as it is extremely difficult. 

“We are dealing with it as urgently as we possibly can,” Ramaphosa said. “We should be pleased that the grid had not collapsed; that would have been the worst Armageddon.”

Marokane also inherited R396.3 billion in debt obligations. In the 12 months before his appointment, Eskom’s interest bill and loan repayments will jump to R81 billion. 

Eskom’s board was convinced that Marokane was the man to turn this around, and his vast experience at the utility and in the broader electricity sector won him the job. 

“Dan has the full support of the Eskom Board. Eskom employees are excited to welcome him back into the organisation,” board chairman Mteto Nyati said at the time. 

Marokane is a chemical engineer with Master’s degrees in petroleum engineering from the University of London and business administration from UCT. 

Crucially, he has years of leadership experience in working at the utility, serving as chairman of Eskom Enterprises and chief commercial and technology officer at Eskom.

Most notably, Marokane rose to become the group executive for capital, which very quickly turned into a target on his back. 

Marokane’s exit from Eskom was not gracious. Alongside other executives, he was suspended in 2015 to make room for people collaborating with the Gupta family to engage in corrupt dealings at Eskom. 

According to the Zondo Commission, the plan to rid Eskom of Marokane and the other executives was hatched at the Durban residence of former president Jacob Zuma. 

Marokane battled to regain his position at Eskom but decided to leave when it became clear that his relationship with the board was broken beyond repair. 

The division that Marokane controlled was overseeing the construction of major projects, including Kusile and Meudpi, which were key sites of State Capture that saw the utility lose billions of rands. 

Marokane left Eskom four days after the first unit at Medupi was connected to the grid.

Dan Marokane re-joins Eskom

After leaving Eskom, Marokane went into the private sector, where he gained vital turnaround experience as part of the management team that kept sugar giant Tongaat Hulett alive. 

Marokane joined Tongaat as an executive in January 2018, just before the company admitted that its profits were falsified and that it had lied to investors. 

After PwC completed its probe into Tongaat’s finances, Marokane was appointed to the company’s board and eventually became acting CEO in February 2023. 

“He has been a key member of the management team, which led the company’s turnaround journey,” the company said in a statement after Marokane’s promotion to acting CEO. 

“He played an important role in internal cash flow optimisation programmes and the management of the company’s asset disposals.” 

After less than a year as Tongaat’s acting CEO, Marokane was appointed to the top job at Eskom, where the utility was trying to regain the skills lost during state capture. 

Eskom said Marokane was joining the company at a time when it faced an existential crisis that required hands-on, bold, and decisive leadership. 

“We expect Dan and his leadership team to accomplish at least two critical tasks. First, they must address the current business challenges. Load-shedding must become a thing of the past,” Nyati said. 

“Second, they need to reposition and restructure Eskom to enable growth and sustainability.” 

“Dan has in-depth knowledge of the Eskom environment. He leads from the front. He will hit the ground running. That is what Eskom and South Africa need right now,” Nyati said.

Eskom’s board appears to have been proven right in appointing Marokane to the CEO position, with the utility significantly improving its operational performance and substantially reducing load-shedding. 

The utility is also on track to post a R10 billion profit in the most recent financial year on the back of its improved operational performance.

This article was first published by Daily Investor and is reproduced with permission.